Thrift Savings Plan (TSP) Rollovers

The Thrift Savings Plan (TSP) was created as a retirement plan for government employees. Members of the military, postal service, civil service, and other uniformed services all have access to a Thrift Savings Plan. It was originally created by the Federal Employee’s Retirement System Act of 1986 to help federal employees enjoy the same benefits that members of the private sector have access to with 401(k) plans.

Thrift Savings Plan Contributions

Typically employees decide to have a set dollar amount per paycheck or percentage of their income contributed to their Thrift Savings Plan. The annual limit as of 2015 is $18,000. Furthermore, if you are over the age of 50 you may be eligible for “catch-up” contributions as well.

Matching contributions depend on whether you are covered by the newer Federal Employees Retirement System (FERS) or the older Civil Service Retirement System (CSRS). If you were hired after 1987 then you are part of the FERS and will receive matching contributions. Because the older CSRS system is more akin to a pension, individuals covered under this system are not eligible for matching contributions.

Thrift Savings Plan Investment Options

There are various types of investment options you may choose with a Thrift Savings Plan. These plans include the Government Securities Fund, the Fixed Income Index fund, and the Common Stock Index fund. Lifecycle funds are also available, which are a combination various funds as well. For more details on Thrift Savings Plan investment options visit tsp.gov.

Thrift Savings Plan vs. 401(k)

Most of the rules of a Thrift Savings Plan are very similar to that of a 401(k). With both plans you make contributions with pre-tax dollars and may take normal distributions after age 59 ½. Required Minimum Distributions also begin at age 70 ½. The biggest difference between these two plans has to do with whether you are a government employee or not. In general, government and federal employees will have a Thrift Savings Plan whereas most private sector employees will have access to a 401(k).

Converting a Thrift Savings Plan to Gold or Silver

If you are changing jobs and are curious about what to do with your Thrift Savings Plan, American Bullion can help. We specialize in adding gold, silver, platinum, and palladium to retirement accounts. If you have a question or would like to know more about your options, please call American Bullion at 1-800-326-9598 to speak with a precious metals specialist.

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