Presented by TSP Agency Liaison Specialist Arvella Collins, Federal Retirement Thrift Investment Board.

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U.S. Department of Health and Human Services (HHS)

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As a young professional, it’s never too early to start planning for your retirement. One tool that is available to federal employees and members of the military is the Thrift Savings Plan (TSP). The TSP is a defined contribution plan, similar to a 401(k), that allows participants to save for their retirement through pre-tax or after-tax contributions, which can be invested in various funds.

If you are a federal employee or member of the military, you are automatically enrolled in the TSP with a 3% contribution from your paycheck. However, it is important to consider increasing your contributions, especially if you are early to mid-career, as increasing the amount you save can provide significant benefits in the long run.

One aspect to consider when deciding how much to contribute is the TSP’s matching contributions. Currently, the TSP matches up to 5% of your contributions dollar for dollar, meaning that if you contribute 5%, the TSP will contribute an additional 5%. Taking advantage of this matching contribution is a great way to boost your retirement savings.

Another important factor to consider when investing in the TSP is the funds available. There are five main funds to choose from, ranging from the safest (G Fund) to the riskiest (C Fund). It is recommended to diversify your investments among the funds to spread out risk and balance potential returns.

It is also important to review your TSP account regularly and make changes as necessary. As you progress in your career and your retirement goals change, you may want to adjust how much you contribute or how you invest. It is also important to review your TSP account to ensure you are not paying higher fees than necessary.

Overall, the TSP can be a valuable tool for building your retirement savings. However, it is important to understand how the plan works and make smart decisions when it comes to contributing and investing. By taking advantage of matching contributions, diversifying your investments, and reviewing your account regularly, you can set yourself up for a comfortable retirement.