Changes

The '''Thrift Savings Plan (TSP)''' is a defined contribution [[pension]] plan for United States government civilian employees and members of the uniformed services.  It was started in 1987 as a major component of the [[Federal Employees Retirement System]] (FERS), the overhauled retirement system for new civilian employees.  It is managed by an independent agency, the '''Federal Retirement Thrift Investment Board'''.

The '''Thrift Savings Plan (TSP)''' is a defined contribution [[pension]] plan for United States government civilian employees and members of the uniformed services.  It was started in 1987 as a major component of the [[Federal Employees Retirement System]] (FERS), the overhauled retirement system for new civilian employees.  It is managed by an independent agency, the '''Federal Retirement Thrift Investment Board (FRTIB)'''.

As of December 31, 2020, TSP has approximately 6.2 million participants (of which approximately 3.8 million are actively participating through payroll deductions), and more than $735.2 billion in assets under management;<ref>https://www.frtib.gov/ReadingRoom/FinStmts/TSP-FS-Dec2020.pdf</ref> it purports to be the largest defined contribution plan in the world.

As of December 31, 2020, TSP has approximately 6.2 million participants (of which approximately 3.8 million are actively participating through payroll deductions), and more than $735.2 billion in assets under management;<ref>https://www.frtib.gov/ReadingRoom/FinStmts/TSP-FS-Dec2020.pdf</ref> it purports to be the largest defined contribution plan in the world.

*I (International Stock) Fund—invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*I (International Stock) Fund—invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*L (Lifecycle) Funds—invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to investments with higher percentages in the G and F Funds.  As of 2020 there are ten such Lifecycle funds established, the L Income Fund (primarily for retired employees who are withdrawing from TSP, though any TSP participant may invest) and nine funds for future retirees (named in five year increments, with the fund named for the upcoming year designed for employees close to retirement, and the fund named for the most-distant year designed for newer, younger employees; the current names range from L2025 to L2065).  Each fund for future retirees is designed for retirees planning to retire in that year, or two years on either side.  Every five years, in years ending in zero and five, the fund for that target year is merged into the L Income fund (with its assets shifted to those of the L Income Fund), and a new fund established with its name taking on the year 45 years after its establishment (e.g. in 2025 the L2025 Fund will be merged into the L Income Fund, and a new fund established which will be called the L2070 Fund).

*L (Lifecycle) Funds—invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to investments with higher percentages in the G and F Funds.  As of 2020 there are ten such Lifecycle funds established, the L Income Fund (primarily for retired employees who are withdrawing from TSP, though any TSP participant may invest) and nine funds for future retirees (named in five year increments, with the fund named for the upcoming year designed for employees close to retirement, and the fund named for the most-distant year designed for newer, younger employees; the current names range from L2025 to L2065).  Each fund for future retirees is designed for retirees planning to retire in that year, or two years on either side.  Every five years, in years ending in zero and five, the fund for that target year is merged into the L Income fund (with its assets shifted to those of the L Income Fund), and a new fund established with its name taking on the year 45 years after its establishment (e.g. in 2025 the L2025 Fund will be merged into the L Income Fund, and a new fund established which will be called the L2070 Fund).

Unless an employee or service member chooses a different fund upon entering Federal or military service, civilian employees will automatically have their contributions established in an L fund based on an expected retirement date of 63, while members of the uniformed services will automatically have their contributions established in the G Fund.  Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are into the G Fund only.

Unless an employee or service member chooses a different fund upon entering Federal or military service, civilian employees will automatically have their contributions established in an L fund based on an expected retirement date of 63, while members of the uniformed services will automatically have their contributions established in the G Fund.  Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are into the G Fund only.

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance (however, upon reaching age 70 1/2 -- or upon retirement if later than that—the employee must withdraw at least the minimum amount per IRS life expectancy tables; TSP will do this automatically if the employee does not):

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance (however, upon reaching age 72 -- or upon retirement if older than 72 -- the employee must withdraw at least the minimum amount per IRS life expectancy tables; TSP will do this automatically if the employee does not):

*Leave the balance, or part of it, in the account

*Leave the balance, or part of it, in the account

*Withdraw the balance, or part of it, either via rollover or cash out, purchase an annuity, or via periodic payments (based on either an amount stipulated by the employee—which can be monthly, quarterly, or annually)

*Withdraw the balance, or part of it, either via rollover or cash out, purchase an annuity, or via periodic payments (based on either an amount stipulated by the employee—which can be monthly, quarterly, or annually)