Good News – the Thrift Savings Plan (TSP) total assets under management (AUM) at the end of 2023 reached $845 billion. This is up from the total $726 billion AUM at the end of 2022. Add to this, the average TSP balance of over 4 million FERS participants rose to $175,692 by the end of 2023 and participation in the Roth TSP reached a record high of 36% for 2023.
Number Of TSP Participants Receiving A Full Match Increases
By the end of 2023, the number of TSP FERS participants taking advantage of the full agency match reached another record of 86.8%. Keep in mind that the Federal Retirement Thrift Investment Board (FRTIB) increased the automatic TSP enrollment for newly hired FERS workers from 3% to 5% on October 1, 2020. If you were hired before this date, your automatic TSP contributions remained the same unless you took steps to increase your contribution and qualify for the agency match.
No More 30-Day Waiting Period Between Withdrawal Requests As of May 15, 2024, the Federal Retirement Thrift Investment Board (FRTIB) has eliminated the 30-day restriction rule giving federal retirees more flexibility when taking withdrawals from their TSP. Previously, retirees were subject to a 30-day waiting period between withdrawals. Now you have the ability to complete unlimited TSP withdrawal requests entirely online in My Account.
“The transition to the new I Fund benchmark index is expected to be complete no later than December 31, 2024.”
Transition To New I Fund Benchmark Index To Be Completed By End Of 2024
The FRTIB Board will change the I Fund’s benchmark index 2024. This change is designed to further diversify I Fund investments and give TSP participants access to more markets and offer opportunities for higher returns without a significant increase in risk. During the transition, you will continue to have access to the money you’ve invested in the I Fund unless you change your investments. The transition to the new I Fund benchmark index is expected to be complete no later than December 31, 2024.
Unfortunately, General-Purpose TSP Loans Up 40%
Nearly 480,000 general-purpose loans totaling a little less than $5 billion were outstanding by the end of 2023. And approximately 5,000 residential loans totaling under $2 million were outstanding in 2023. If you’re closing in on retirement yet still paying off a TSP loan, it’s wise to pay it off in full because TSP loans must be paid back within 90 days of separating from service. Otherwise, the amount you owe will be considered a TSP distribution and you’ll have to pay federal income taxes on the total of the loan balance.
Sources:
https://www.tsp.gov/news-and-resources/plan-news
https://www.tsp.gov/plan-news/2024-05-15-No-30-day-waiting-period-between-withdrawal-requests
https://www.govexec.com/pay-benefits/2024/03/tsp-savings-rate-tsp-loans/395109
