Understanding Your TSP Options

By Tammy Flanagan

April 5, 2013

Since April is Financial Literacy Month, I’ve decided to devote this week’s column to helping you gain a better understanding of your Thrift Savings Plan investment choices.

At the end of 2012, TSP plan assets stood at $330 billion, with 4.6 million participants. This translates to an average participant balance of $70,000. At the end of 2011, the G (government securities) fund held the largest balance of any of the funds, at nearly $148 billion.

Here’s a quick quiz: Why do you think there’s so much money in the G Fund?

The answer is all of the above. Just because almost half of all TSP funds are invested in the G Fund doesn’t make it the best choice for everyone. Federal Employees Retirement System investors in particular should try to gain a better understanding of retirement investing versus saving money for the near term.

Words to Live By

Long-term investing requires an understanding of a few key terms:

TSP Choices

Here are the investment options currently offered by the TSP:

The number of investment options is intentionally limited. It keeps things simple so that even novice investors can understand their options.

So which of the choices is best for you? Here are some resources to help you decide:

Here are some final numbers to consider:

I hope you’ll spend some time this Financial Literacy Month learning something new about retirement investing.

By Tammy Flanagan

April 5, 2013