Matt: So first of all, how does TSP matching work? Because this is your greatest advantage.
If you put in 0% as a FERS employee, the agency automatically puts in 1%. So you have a total of 1% going in. If you put in 1% of your paycheck, and let me emphasize it is per paycheck…I've run into a lot of federal employees that will try to dump a lot of money in it the end of the year, or two of the months when you get three bi-weeklies, they want to increase their contributions. You can change your contribution every pay period, but your matching is only per pay period.
So if you put in 1%, the agency matches it dollar for dollar. Your second percent, they match it dollar for dollar. Your third percent, they match dollar for dollar. For new employees now, they automatically default to 3%: new employees are gonna get the full 100% matching. So if you put in three, the agency is putting in 4%, so you have a total of 7% of your check going into your TSP: your future retirement. If you put in 4 and 5%, they match $.50 on the dollar.
So the bottom line is, if you do 5%, the agency does 5% and you have 10% of your check, of your income, going into your account at Thrift Savings Plan.
Please take advantage of this. This is one of the number-one pitfalls that federal employees make, is not taking advantage of the matching program, especially if you’re FERS in the TSP program. You may not be able to do 5% today, so if you can move yourself to the 2 or the 3%, as you get raises and promotions or as COLAs are implemented, try to move your paycheck up as you can.
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