Government 401k Kansas

Government 401k Kansas

 

In simple terms, the TSP is the Federal Governments’ version of a government 401k plan.  The government 401k is a defined contribution plan where federal employees and military service members can contribute a percentage of their pay, on a tax deferred basis, and the government will match those contributions up to 5%.  Investment options are very straightforward and include 3 stock funds, 1 bond fund, and a money market fund.  Life Cycle funds are a combination of the 5 core TSP funds (think of them as a portfolio of all the TSP funds).  They rebalance quarterly, decreasing your exposure to the stock funds as you progress toward retirement.  We have more in-depth information about the Lifecycle Funds on our site.

One very important thing to understand about the government 401k is that it is a retirement account, not a brokerage account. The Thrift Savings Plan is a vehicle designed to build wealth for retirement.  It is not a “day trading” platform.  You must treat the government 401k like a marathon, not a sprint. Daily and weekly volatility are much less important than monthly and yearly performance.

 

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