Sam i.e. “Gov Worker” started working for the government at age 18 and loved it so much that he never left. He started GovernmentWorkerFI in 2019 to help fellow federal employees understand their benefits, take control of their finances, and live their best lives.

Thrift Savings Plan (TSP) Updates for Military and Federal Employees

Sam joins ClearanceJobs to chat about the Thrift Savings Plan (TSP), a retirement account available to many military members and federal employees. Basically the government’s 401(k) plan equivalent. The TSP is undergoing several changes in the next few months, beginning with a transition to a new service provider, and also a new mutual fund window with many more investing options. Sam walks us through the headlines, and little more on why the new mutual fund window may not be the right fit for you.

New Fund Window for TSP

The TSP announced that in 2022 they will now add a mutual fund window to the TSP. According to the Federal Register, this change was in response to a 2009 Congressional change to the TSP which allowed the addition of the mutual funds.

The TSP board is trumpeting that they have innovated and modernized by allowing TSP participants to invest in mutual funds outside of the five core TSP Funds. But there are some downsides or costs that military folks and federal employees should be aware of. In the TSP mutual fund window, you pay more money, have worse investment options, with higher fees, for a small fraction of your TSP balance. And with the astronomically increase in the number of funds and options available for investment choices, it can be pretty overwhelming.

Who should consider putting some (or the maximum amount) of their retirement nest egg into the TSP mutual fund window?

It’s been shown many times over that active fund managers (what the TSP will offer) can’t beat index funds (what the TSP already offers). Warren Buffet, the most famous stock picker in the world, recommends index funds and even made a million dollar bet that index funds would beat any hedge fund over a 10-year window. While there are individuals who might benefit from this change, the moral of the financial story is to always do what’s best for your situation, and consult with a professional when needed.

Tune in to this episode of ClearedCast to learn tips for those who will have the 5,000 options available and aren’t sure which options are right for them.

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Katie Helbling is a marketing fanatic that enjoys anything digital, communications, promotions & events. She has 10+ years in the DoD supporting multiple contractors with recruitment strategy, staffing augmentation, marketing, & communications. Favorite type of beer: IPA. Fave hike: the Grouse Grind, Vancouver, BC. Fave social platform: ClearanceJobs! 🇺🇸