JOINT BASE SAN ANTONIO, Texas –
A class scheduled from 10-11:30 a.m. Oct. 19 at the Joint Base San Antonio-Randolph Military & Family Readiness Center will allow service members and Department of Defense civilians to learn about a savings plan that can help them build a sizable nest egg for their retirement years.
Administered by the Federal Retirement Thrift Investment Board, the Thrift Savings Plan is a tax-deferred retirement savings and investment plan for service members and federal employees that is similar to 401(k) plans, but with one distinct advantage, said Bob Williams, JBSA-Randolph M&FR community readiness consultant.
“One big advantage of the TSP is its extremely low cost of 39 cents for every $1,000 invested,” he said. “There’s no other investment program in the world that has such a low management fee; the lowest I’ve seen is $4.50 per $1,000. That’s a huge difference.”
During the class, participants will learn about contribution limits, matching contributions, tax-deferred investments, return rates, options to consider after separating from the military or federal service and much more.
The amount of money a person can contribute to the TSP is another advantage of the plan, Williams said.
“The maximum contribution is $18,500 per year for persons 49 years old and younger and an additional $6,000 for those who are 50 and older,” he said.
Service members may also contribute bonus pay, incentive pay and hazardous-duty pay to their TSP, Williams said. When they leave the military, they can no longer contribute to their TSP, but they can roll money from it into a 401(k) or a traditional individual retirement account, or IRA.
TSP participants also benefit from a matching amount from the government: a maximum of 5 percent from a person’s base pay, he said.
Those who attend the class will learn about the funds available to them in the TSP.
TSP investors can choose from five basic funds, ranging from the low-risk G Fund, or government securities fund, to the moderate- to high-risk I Fund, international stocks of developed countries. An additional fund, the L Fund, or Lifecycle Fund, is a professionally determined investment mix that covers the five basic funds.
“The L Fund is managed for you,” Williams said. “They manage your resources and spread them out over the five funds, then move them into a conservative investment portfolio as you get closer to retirement.”
Yet another benefit of the TSP is that service members who are enrolled in it will have a retirement nest egg even if they do not stay in the service for 20 years.
With the DOD’s Blended Retirement System now in effect, new service members are automatically enrolled in the TSP, giving them a head start on their retirement savings and ensuring they will not leave the service with no money set aside.
For more information on the TSP class, call 210-652-5321.