TSP Savings Plan

TSP Savings Plan – A Good way to save for the future!

The TSP thrift savings plan is a retirement savings plan for Federal employees. TSP savings plan gives each participant a retirement income that would be highly dependant on the amount of contribution the employee (or its agency) makes over the years that he is working. The TSP thrift savings plan offers federal employees retirement savings and tax benefits that private corporations offer to their employees such as 401K plans.

There are different types of TSP savings plan funds where investors could invest. One type is the lifecycle fund, which enables the participant to diversify his accounts among the G fund, F fund, C fund, S fund and I fund using a professionally determined investment allocation, which is designed to different time scales. Other funds would enable the participant to invest in stock and earn a high rate on investment return.

401K plans enables the worker to save for retirement and have some savings invested while deferring current income taxes on the saved money, and earning until withdrawal. 401k plans are offered by private corporations unlike the TSP plan which are offered to government employees. It is a salary reduction plan where employees must choose a percentage of their salary to contribute to the plan.

401K rollover is the next step after the retirement plan. It moves a participant’s 401K retirement fund after retirement which they earned in their last work. The rollover is done when a participant leaves his previous employer. In this case the rollover fund would still continue to grow on different sources.

In the event that a person needs to do a 401K rollover the first thing he should do is find a new place for the money to be moved into. An individual should open an IRA rollover account that will hold their account and act as a custodian for the assets that they own. There are different steps to follow and the whole rollover would take between two or four weeks.

An Individual retirement account is another retirement plan for employees. A very common type of IRA is the Roth IRA account, in which contributions are made, from after tax assets. A Roth IRA account allows an individual who does not exceed a certain income limit, to invest money by making non-deductible contributions that grow tax-deferred. They could do these investments whether they are covered by an employer-sponsored retirement plan or not, and working taxpayers or non working spouses of any age, are all eligible to open this type of IRA account.