Many Thrift Savings Plan options available to Airmen

  • Published
  • By Airman 1st Class Staci Miller
  • 52nd Fighter Wing Public Affairs
The Thrift Savings Plan is a U.S. government-managed, 401k-type payroll-deduction program designed to provide tax-deferred retirement plan for servicemembers and federal civilian employees. 

Military members can contribute any whole percentage of basic pay, as long as the annual total of the tax-deferred investment doesn't exceed $16,500 for the year. If they contribute from basic pay, Airmen can also invest all or part of their bonuses, special pay or incentive pay. Those serving in tax-free combat zones are allowed up to $49,000 in annual contributions for the year. The $49,000 total includes tax-exempt combat zone contributions and regular deferred contributions. 

"One of the benefits of the TSP is the management fees," said Jason Gunnarson, Airman & Family Readiness Center community readiness consultant. "The federal government has made those fees almost zero, at .02 percent." 

Servicemembers have five TSP fund programs to choose from. 

"No matter what your risk tolerance, there is a fund for you," said Mr. Gunnarson. "You want to make sure you're not putting all your money in one basket. You want to spread it out between all the funds." 

The Government Security Investment, or G Fund, is considered the safest of the five TSP funds. It consists of treasury bonds and federal-backed investments. The other funds offer riskier investment strategies, but potentially higher yields. The Common Stock Index Investment, or C fund, which consists of stocks of major established corporations; the Fixed Income Index Investment, or F fund; the Small Capitalization Stock Index Investment, or S fund; and the International Stock Index Investment, or I fund, are all options for contributors. 

The Lifestyle Fund option, or L fund, takes all the diversification work out of the contributor's hands. It distributes money among the five funds and adjusts the distribution over time. The L fund automatically places money in the risky, but potentially higher-yield funds early on, and moves them to more secure, conservative investment options as the participant nears retirement. 

Even with the current weak economy, servicemembers shouldn't shy away from contributing. 

"It's all about opportunity, the opportunity is right now. Now is the time to act because you are buying more shares because the prices are so low," said Mr. Gunnarson. 

For more information or to make changes to your TSP investment options, visit www.tsp.gov.