June 19, 2013
The thrift Savings Plan or TSP was introduced as a means of retirement income for uniformed military personnel as well as civilian employees on the payroll of the United States Government. It is similar to the 401(k) plans offered by corporations to their employees. It came into being with the enactment of the Federal Employees Retirement System Act, 1986. If you are a member of the uniformed services, or a Federal employee, you might know this already. On paper, the TSP is a great investment option. Its fees are a mere 0.3%, the lowest among all retirement plans. If you have $100,000 in your ri Savings Plan, all you need to pay is $30 towards expenses. Employers sponsored 401(k) plans tend to charge ten times this amount, and an IRA (Individual Retirement Account) could charge up to 2.3%. For the same $100,000 corpus, this translates to $2,300 or a diference of $2,270 when compared with the TSP. Future Advisor, which provides investment and financial advice online, found that it would cost anywhere between $54 and $2,376 per year when you move out of the TSP.
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