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As the saying goes, money makes the world go round. But around the world, there is no investment plan like the Thrift Savings Plan.
The Ramstein Airman & Family Readiness Center hosts monthly classes to increase the efficiency of eligible members’ savings. The class covers several topics, including how to manage TSPs, the difference between traditional and Roth, the importance of beginning a retirement plan, and the different types of funds available.
“The class educates participants about what the TSP is, what to do with their money and when, where they can save their money, and how they can make the most of their money,” said Kyle Lambert, 86th Force Support Squadron A&FRC community readiness specialist. “The Roth-style TSP was introduced in 2012 and makes the plans more competitive with other investment options.”
Roth TSPs are taxed before they are deducted from paychecks, as opposed to traditional TSPs where the money is taken before taxes and taxed when it is withdrawn. The Government Securities Investment Fund is the default fund out of five TSP options and is considered a “glorified savings account,” Lambert said.
“The thing I see the most is people assume their money is going to be fine when it’s in the G Fund,” Lambert said. “They don’t know what fund their money is in, so when they retire they don’t see the growth they want. They can miss out on a lot of good opportunities by not diversifying their investments.”
Opportunities depend on which risk-and-return option is selected. Some of the risks include loss of money, and the percentage varies fund to fund. During the last year, the fund options were:
• G Fund, low to no risk with a return of 1.5 percent
• F Fund, low to moderate risk with a return of 1.71 percent
• C Fund, moderate risk with a return of 24.97 percent
• S Fund, moderate to aggressive risk with a return of 35.16 percent
• I Fund, moderate to aggressive risk with a return of 24.5 percent
Any plan is better than no plan, said Tech. Sgt. Jeffrey Aaron, 86th Civil Engineer Group unit deployment manager, who attended the class in order to share information with younger Airmen and NCOs.
“A small savings now, invested properly over time, can really have some great benefits for your retirement,” he said. “Everybody wants to have some extra cash to be able to take vacations, travel and buy things or whatever it might be.”
The investor has three options for their TSP once separated from the military. They may leave what has already been invested, without being able to add to it, but it will continue to accrue interest; transfer the money to an alternate investment plan; or withdraw the money through one lump sum or an annuity, enabling the investor to receive money and accrue interest on what hasn’t been withdrawn.
Whether in the Bahamas, the mountains, a big city, back home or anywhere in the world, the TSP resource is one tool eligible members may use to get them where they want when they retire
For more information about TSP classes or programs, call the A&FRC at 06371-47-5100 or 480-5100.
