Thrift Savings Plan: Beginner’s Guide on how to Setup Your TSP Account

The Thrift Savings Plan was created in an effort to provide a form of investing for Government employees which was similar to the private sector’s 401(k) program. Depending whether you go with Traditional or Roth Thrift Savings Plan, investing with this program provides benefits such as tax credits or tax-free growth on your investment. As of 2018, your total contributions to Thrift Savings Plan are limited to $18,500. 

As a junior Soldier, I was attending a briefing with my Battalion wherein the Command Sergeant Major was giving his parting words of wisdom as he was preparing for retirement. The one thing he focused his speech on was his lack of planning for the future, specifically not investing with the Thrift Savings Plan. The Sergeant Major had stated the one thing he would go back and change during his time of service was the contribution to the program. 

Ironically, it would be several more years until I started to take advantage of Thrift Savings Plan. And I am fully in agreement with the Sergeant Major that I wish I had started when he told us about the program. 

From my interaction with several Soldiers, I have found the most common reason given for why they had not started investing with Thrift Savings Plan is simply that they do not know how to begin. Rest assured, Thrift Savings Plan is the easiest form of investing to get started. So let’s get started.

 

The beginner's guide to start investing with the Thrift Savings Plan today.

Lets get started:

The first step in creating your TSP account is to log onto your myPay account. Once you are at the myPay site, choose to login with whatever method you have already set up. If you are new to myPay, select the link on the far left titled “Create an Account”.

I highly recommend using the SmartCard Login when accessing myPay.  Not only does it have a higher level of security to prevent your account from being compromised, it only requires you to remember a PIN instead of a complex password.

Related Article:
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myPay Logon Screen.
Once you have logged into your account, you will be at the menu of tasks which may be completed within myPay. At the bottom of the list is an option titled “Traditional TSP and Roth TSP.” Select this option.
myPay options menu.

The next page will open up and provide you with a table on where you would like your contributions to come from. You will enter in a percentage value of your base pay, or other pays you would like to have sent to your TSP account. Think of this as an allotment, they money is sent to TSP automatically, and the pay you receive is reduced by an equal amount.

There you have it; it was that easy to get started. Unfortunately, we have only just begun the process of getting your account up and running working efficiently for you. By default, the money withdrawn from your account is put into the G Fund.

Don’t worry; it is safe there. The G Fund does not lose value, but at the same time, it doesn’t really gain to much value either. If you are planning on using your TSP account to fund your retirement, then you will need to move out of it to one of the other funds.

 

Making Changes to your TSP account:

So how do we change what we are investing in with TSP? Great question, I am glad you asked. Unfortunately, if you made your account today, you will need to wait. When you create a new account, you will receive two letters in the mail from TSP. One contains your account number, and the other contains your password. But once you have these two items, you can move on forward.

To change which fund you are investing in, you first need to go to the TSP Website. Once you are there, you will see the login information at the top of the screen. Enter in your email and password information. Once you have logged in, you will see a menu going down the left side of the screen. There are two sections we are particularly interested in.

The first section is “Contribution Allocations.” Within this section, you will be able to change where all future allocations go in your TSP account.

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Thrift Savings Plan options menu.

As mentioned earlier, the G Fund is the default and should reflect you have 100% going there. You need to enter the percentage of the money they receive into which funds you want to invest with. Don’t worry if you think you made a mistake. You can always change your allocations.

The Contribution Allocations section only changes future receipts of money, but will not affect money already in the account. To change how you are investing with money already in your account, select the menu option titled “Interfund Transfers.” It will bring up a table that is similar to the Contribution Allocations. Enter in the percentages of the funds you want, and away you go.

I wish you great success in the future that the Thrift Savings Plan will bring to you.

Related Articles:
Stop Eating Your Retirement: Become a Millionaire with your Current Income
Thrift Savings Plan: Beginner’s Guide to the TSP Funds
How-to Guide: Setting up an Allotment on myPay

Disclaimer: This post is not intended to give you advice on investing. Instead, it is an educational guide on how to start using the Thrift Savings Plan program.

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