Officials at the agency that manages the federal government’s 401(k)-style retirement savings program are acknowledging a significant increase of 7 points in employee engagement with the Thrift Savings Plan in 2020, as well as accolades on the agencies handling of the COVID-19 pandemic.
Interaction and satisfaction with TSP are on the rise according to TSP Director of Resource Management Gisile Goethe, who during Monday’s meeting held by the Federal Retirement Thrift Investment Board said the agency’s global satisfaction index increased by six points, from 66 in 2019 to 72 in 2020, and that the Thrift Savings Plan improved its employee engagement score from 70 out of 100 in 2019 to 77 last year.
The rise in TSP interest corresponds with a 1.4% improvement in employee response rates, as 74.4% of eligible TSP workers took the survey last year. The annual survey was run by the Office of Personnel Management (OPM) between Sept. 24 and Nov. 5, and regardless of two delays due to the pandemic, more TSP workers are voicing their opinion; and it is being heard.
Now, shifting gears from news and polls, to numbers and practicality: as a federal employee, are you utilizing your TSP and subsequent benefits to the fullest?
Many retirees look to invest conservatively in their Thrift Savings Plan when they retire, but they also typically only look at their TSP balance while determining their allocation. The classic 50/50 (50% stocks and 50% bonds) retiree portfolio changes dramatically when the value of the FERS annuity is added into the equation. Most studies on this topic have found that a 4% withdrawal rate is ideal, with the best chance of investments lasting a lifetime.
Once you have determined the appropriate percentage, all you need to do is figure out what value it would take to produce the given income. A federal benefits agent can help sort out the finer details such as factoring in social security and determining a percentage that is right for you.
If you are interested in learning more about retirement, the Office of Personnel Management (OPM) recently released a new video to federal employees, explaining their retirement annuity benefits under the two most common Federal retirement systems: The Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS).
The video, Your Federal Retirement Annuity – CSRS and FERS — covers the following topics:
- Which is my retirement system?
- How much of my salary is contributed to my retirement system?
- When can I retire?
- What service is creditable toward my retirement eligibility and annuity benefit?
- How can I estimate my monthly annuity benefit?
- What reductions could apply to my annuity benefit?
- How can I prepare for retirement?
Here at Federal Benefits Service, we specialize in offering courses and federal tip videos that dive deeper into these very topics. Please be sure to get involved into your retirement sooner rather than later, take TSP surveys and watch for our weekly market advice by becoming a member today.