TSP - It's Your Money!

(This article first appeared in the Sept-Oct 2017 issue of the American Postal Worker magazine)

By Retirees Director Nancy Olumekor

The USPS reports that each year postal employees throw away almost $200 million in retirement benefit matching funds by failing to save in their Thrift Savings Plan (TSP).

It is never too early or too late to start planning for retirement. You need to be clear about what you want your “golden years” to look like.

If you are a Federal Employee Retirement System employee, by putting just five percent of your income into your TSP, the Postal Service will match the amount you contribute with an additional five percent. That means you’ll have twice as much going into your TSP as you originally contributed. Plus, you could benefit from lower taxes on your current income. Can’t afford five percent? Every dollar makes a difference.

Investing in the TSP is easy. It is made up of five core funds that you can mix and match. Or, if you aren’t sure which funds to choose, you can invest in a Lifecycle fund that is professionally designed based on when you’ll need your money.

An employee earning $50,000 per year who contributes five percent to their TSP – about $95 per paycheck – and earns an average annual rate of return of six percent, can potentially have a TSP account worth nearly $420,000 after 30 years.

Time is your biggest ally when it comes to the growth of your TSP account, so starting early and saving consistently can make a tremendous difference.

If you need to, go smaller and deposit $20 a week, which is only approximately $1,000 out of your paycheck each year.

You can make or change TSP contributions at any time. For more information on TSP and your investment options, visit https://liteblue.usps.gov/tsp.

Consistent and early savings can be the difference between a comfortable retirement and a difficult one. It is never too early or too late to save.