By Jay Shareef and Chris Rhoads
Planning for retirement is no easy task. The years leading up to retirement can be an overwhelming time with all the decisions to be made: where will you live, how will you spend your time, and, most importantly, how will you fund your retirement lifestyle? It’s an exciting time but it can also be stressful. What’s more, the process for how and when to access your retirement funds can be confusing.
Staying on top of your retirement plan can be daunting, especially when you’re juggling other responsibilities. At WealthFlow Financial, we monitor any changes or updates to the federal thrift savings plan (TSP) so you have one less thing to worry about. Here we have provided an overview of the new options available in your TSP.
Mutual Funds Investment Option
One of the biggest, and most requested, changes is the ability to invest in mutual funds in addition to the standard index funds that have been traditionally offered through the TSP.[1] This change has been requested by members looking for greater investment flexibility. While it’s great to have more investment options, it comes with a price. Before moving your money over to mutual funds, it’s wise to do some research first so you know what to expect. Let’s look at some of the numbers involved with investing in mutual funds through your TSP:[2]
- Maintain a $40,0000 minimum balance
- Minimum initial investment of $10,000
- Annual maintenance fee of $95
- Administrative fee of $55
- Baseline, per-trade fee of $28.75
When you compare these costs to the low-cost TSP index-fund offerings, you will see the mutual-fund option is much more expensive. That doesn’t necessarily mean it’s not a good option; however, it’s important to talk to your financial advisor to discuss the pros and cons and determine whether or not this is a good choice for you and worth the extra cost.
Mobile App & Other Features
In addition to the long-awaited mutual funds investment option, the TSP has many other new features that will make managing your retirement plan more convenient. You can see the full list of new features, including detailed information, on the TSP website,[3] but we have provided a brief overview of some of the more important updates.
The TSP Mobile App
The saying “There’s an app for that” is true for good reason. Almost anything you could want or need these days is available through an app; and now that includes managing your TSP. The new app is available to download in your smartphone’s app store and includes all the features and services you can find on the TSP website under My Account. The mobile app includes the virtual assistant, AVA, to help answer your questions and provide customized support around the clock. When you access your account via the mobile app, you will have the option for enhanced security features such as logging in with fingerprint access or facial recognition.
My Account Access
If you haven’t logged in to My Account recently, you will need to go through the one-time setup process to log in and access the updated platform. Once you create your new username and password and complete the other steps, you will be able to log in and see the enhanced design, tools, and other features. Some of these include:
- A more user-friendly, customizable home page
- Virtual assistant AVA through live-chat communication
- A secure participant mailbox to receive messages, documents, and statements about your account
- An account lock feature for enhanced security and fraud prevention
Efficient Online Transactions
Now you can save time and reduce paperwork by utilizing some of the new features through My Account or on the new mobile app. Services such as requesting transactions, uploading forms and documents, electronic signatures, and submitting beneficiary information are all available online. You can even scan and deposit checks through the app! With all these services now available at your fingertips through the mobile app, managing your retirement plan is much more streamlined.
How Do These Changes Affect Your Plan?
Even though all these updates are meant to be helpful, it’s a lot to take in at once and might seem overwhelming at first. The good news is that you will now have more options and convenience in managing your retirement plan. However, keeping track of everything can be a full-time job! This is where the help of a trusted financial advisor can prove beneficial—someone who knows the ins and outs of the federal TSP and can help you stay on top of changes so you can have confidence going into your retirement years.
If you’re concerned about how to navigate these changes and don’t already have an advisor helping you learn more about your options, reach out to us at (301) 798-5250 or schedule a phone call now.
About Jay
Jay Shareef is vice president, financial advisor, federal benefits consultant, and co-founder at WealthFlow Financial. As a U.S. Army veteran, Jay is passionate about helping federal employees create a bulletproof plan for retirement and navigate the often confusing and complicated federal benefits landscape. He spends his days educating and providing clients with unbiased insurance benefits and retirement strategies to help his clients create guaranteed income for life. As a problem-solver and trustworthy resource, Jay always puts his clients and their needs first so they can find financial peace of mind. To learn more about Jay, connect with him on LinkedIn.
About Chris
Chris Rhoads is a co-founder and vice president of WealthFlow Financial. As a registered investment advisor and independent financial professional, Chris is committed to helping his clients in retirement and he takes a holistic approach to financial planning that includes insurance and risk management, investments and wealth management, retirement income planning, and estate and tax planning. Chris has been married to his wife, Tia, since 2009 and they live in Frederick, MD, together with their two young daughters. In his free time, Chris enjoys traveling, watching sports, and being active in causes about which he cares passionately. To learn more about Chris, connect with him on LinkedIn.
[1]https://www.stripes.com/theaters/us/2022-02-17/thrift-savings-plan-mutual-funds-mobile-app-electronic-transfer-5062339.html?utm_source=Stars+and+Stripes+Emails&utm_campaign=Daily+Headlines&utm_medium=email
[2]https://www.military.com/money/personal-finance/thrift-savings-plan-tsp/big-changes-coming-thrift-savings-plan.html
[3] https://www.tsp.gov/new-tsp-features/summary-of-changes/