You’re turning down free money by not taking advantage of this opportunity.

By John Miceli,  Treasurer

The present economic conditions certainly determine your spending ability as well as your save-ability.  This is why you should be proactive in your participation of your 401(k). TSP’s ability to put enough money away along with the mindset that your employer contributions allow you to have that nest egg, if not for the simple reason to retire comfortably.

This introduction of what the Thrift Savings Plan is should peak the interest of all you newly converted regulars, all the way up to the most senior tenured union members.

You still need to be aware of how each fund performs and what amounts suit your goals and lifestyle. This requires staying on top of these funds based on what the market and current economic conditions are. The point is to participate!

The Postal Service automatically contributes 1% whether or not you are enrolled.  But why wouldn’t you elect for more?

After the automatic 1%, they match an additional 3% dollar for dollar that you contribute each pay period and 50 cents on the dollar for the next 2% of pay.  The amounts you contribute above 5% are not matched.

You’re turning down free money by not taking advantage of this opportunity.

It is your responsibility to manage these funds based on how well the stock index you’ve selected is performing.  You can research the five individual funds to choose from:

G Fund (Government Securities) F Fund (Fixed Income Index)
C Fund (Common Stock Index) S Fund (Small Cap Stock Index) I Fund (International Stock Index)

TSP began offering “Life Cycle Funds” in 2006.  This option relieves you of the headache of managing the performances of the funds you allocated your money to.  “L Funds” are chosen by your need. Participants with longer investment horizons are able to tolerate more risk.  Participants who are approaching or have reached the time when they will need to use their retirement savings have a lower tolerance for risk.

The mix of stocks, bonds and Treasury securities differ according to the date when someone needs to use the investment money.  An em-ployee with many years left will invest in a L Fund that includes more stocks, which are riskier but have potential for higher returns in the long run.

But as the date approaches in terms of needing the money, the L Fund will automatically change to include more bonds (less riskier than stocks) and Treasury securities (risk free). These are the (5) L Funds:

L Income (for those preparing or already withdrawing their money)
L 2020 (for those who plan to with-draw between 2016 and 2024)
L 2030 (for those who plan to with-draw between 2025 and 2034)
L 2040 (for those who plan to with-draw between 2035 and 2044)
L 2050 (for those who plan to with-draw between 2045 or later)

You can enter and leave any of the funds whenever you want.  All postal employees can use Postal EASE to process your TSP elections.  If you are changing an election, it must be processed by 12 noon (central) by the second Wednesday (day12) of each pay period for the election to be ef-fective in that pay period otherwise it will take effect the following pay period.

Your USPS pin and TSP pin are needed.  Employees in need of their TSP pin can go to the web site at www.tsp.gov or call the TSP thriftline toll free at 877-968-3778 (TDD: 877-847-4385).

Be active and knowledgeable in what you’re investing…
it’s your money and future.