When Congress set up the three-legged Federal Employees Retirement System (FERS), they estimated that the Thrift Savings Plan (TSP) would provide federal employees with a substantial portion of their future lifetime income.

By some estimates, the TSP will be the source of one third to one half of federal employees’ retirement nest egg, alongside Social Security and their FERS annuity. That’s why it’s important to secure your TSP nest egg with a well-designed and executed plan. To get started, there are three vital steps to take.  

Determine Your Income Needs

More than half of federal employees do not know how much money they will need to retire. Even those who do know often do not have a plan to back it up. Breaking down your FERS annuity and Social Security benefits will provide you with the remaining income needed from the TSP.

Take Advantage Of Catch-Up Contributions

In addition to making regular TSP contributions, you may also make TSP catch-up contributions if you are age 50 or older (or will be turning age 50 in 2021). The 2021 IRS annual limit for catch-up contributions remains at $6,500. This amount is in addition to the regular TSP limit of $19,500. Extra contributions will help you build additional TSP savings for your retirement.

Eliminate Undue Investment Risk

Too many federal employees have either been too conservatively invested early on in their careers or are taking too much risk when nearing their final working years prior to retirement. Both mistakes can have a hugely negative impact on your investment and future goals.

A Federal Retirement Consultant℠ (FRC) can help you determine the right fund allocation strategies to elect, the right time to take advantage of retirement plans, and generally how to get a picture of how the entire process works.

For more details about securing your TSP nest egg, and to learn more about working with an FRC℠, download the latest issue of our free magazine.