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TSP Basics

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Over the years I’ve talked to many federal employees about their Thrift Savings Plan (TSP) [2]. Unfortunately most don’t have an understanding of what their options are at retirement.

First, let’s discuss your current TSP allocation. Does your current allocation still meet your needs and goals? What I have found is most folks seldom reallocate investment options during their working years. The issue is that when you finally sit down to prepare for retirement you may find most or all of the money in your TSP invested in more growth oriented funds C, I, and S [3]; which may have added more risk than you were aware of. It’s a good thing to look at your account at least yearly to see if your allocation meets your specific needs and adjust your allocation to align with your personal situation.

Secondly, should you consider taking advantage of the new Roth TSP option that will be available in May. Dennis Damp wrote an article titled Roth TSP Contributions – Are They Right For You [4] That you will find informative.

Thirdly, let’s look at the TSP options [3] you have when you retire.

IRA Funding Options:

Withdrawals of a tax-deferred accumulation are subject to the ordinary income tax, and possibly a 10% federal tax penalty for withdraws prior to 59 ½. Guarantees are backed by the claims –paying abilities of the issuing insurance company and do not apply to the investment return or principal value of a sub-account.

Before investing, consider the mutual funds and/or variable annuity’s investment objectives, risks, charges, and expenses. Contact Paul Risser for a prospectus containing this information. Read it carefully.

In short, your options are quite varied when looking at your specific financial situation. Take the time to asses what’s best for you. Seek professional help to determine answers to your retirement questions such as:

There’s no right or wrong answer, but you should be informed so you can make a decision that best fits your financial situation. I’m fully licensed to be able to assist you with your personal financial questions and would be happy to help.

Paul H Risser, host of this site’s Financial Planning Forum [5], is an Investment Advisor Representative with and Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. (TFA) member FINRA, SIPC and a Registered Investment Advisor. Non-Security products and services are not offered through TFA. TFA and Risser Financial Services [6] are not affiliated.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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