How's it going everyone? My name is Derek Ifasi, owner of the Classic Financial Group. Today's topic I want to discuss with you is the Thrift Savings Plan. In particular, I want to discuss the risks involved with the diverse deployment of funds and how to avoid those risks. It is important to ensure that you are leveraging your dollars in the correct way based on your retirement situation and specific goals. A Thrift Savings Plan is mainly set up through a federal government agency for federal employees. Every year, individuals working for this agency have the option to contribute to a savings plan, known as TSP. Think of TSP as a bucket of money where portions of income can be placed for retirement savings. The amount of money placed into the bucket and any matching contributions are important, as well as the percentage rate of return. However, placing money into any retirement account, including TSP, comes with certain negative aspects such as market loss and fees. This can result in a smaller bucket at the end of the year. When it comes to the most crucial part of your life - retirement - it is important to ensure that you are withdrawing money from your TSP in a safe and consistent way. One of the largest risks with a TSP is the possibility of outliving your money. When you leave your money in the TSP account, there are certain benefits, but also mutual fund related charges, TSP related fees, and advisor fees. These fees are not guaranteed to make your account value go up. Therefore, it is important to leverage your withdrawals properly to avoid outliving your money. To maximize the withdrawal process, you can consider rolling over a portion or all of your TSP plan into a specifically designed IRA contract. This...
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