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For federal employees, TSPs automatic contributions, higher employer matches and low fees probably make them a superior choice. For people who dont work for the federal government, 401(k) plans are still a good choice for retirement savings and can be central parts of individual financial strategies.
While they may not have as many funds to choose from, TSP participants do have one big advantage over most 401(k) investors: lower fees. The total expense ratio, which covers both investment and administrative fees, is 0.066% for individual TSP funds.
By participating in the TSP, Federal employees and uniformed service members can save part of their income for retirement, receive matching agency contributions, and reduce their current taxes.
The first 3% is matched dollar-for-dollar by your agency or service; the next 2% is matched at 50 cents on the dollar. This means that when you contribute 5% of your basic pay, your agency or service contributes an amount equal to 4% of your basic pay to your TSP account.
Investment options are more limited, but the expense ratio is much lower than at many private employer funds. And the employer match is a bit more generous than average. If you have access to a TSP, max out the match before you explore any other tax-advantaged retirement accounts, such as a traditional or Roth IRA.

People also ask

Your best bet is to stick with the C, S and I Funds. Heres the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the SP 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.
Verdict: Keeping your funds in your TSP may be best if you arent sure what you want to do next. There is no harm in leaving the TSP to grow while you figure out your next steps. If there is a chance that you may go back into federal service, then leaving it in the TSP is probably your best option.
Here are some of the cons of TSP plans: In order to receive the maximum employer match, employees need to allocate at least 5% of their salary to their TSP. Some employees may not be aware they are contributing to a retirement account through automatic enrollment, which could lead to misunderstandings about their pay.

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