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Tracy Wayne Mitchell: FederalEmployees Maximize RetirementFunds by Contributing to ThriftSavings Plan
The President of Federal Employee BenefitAdvisors in Springfield, Missouri, TracyWayne Mitchell provides clients with expertguidance in maximizing their retirementdollars. Tracy Wayne Mitchell recentlypublished The Informed Fed: A SurvivalGuide to Federal Employee Benefits.
The federal government allows its employeesto participate in a wide range of retirementsavings programs. One such program, thethrift savings plan, known as a TSP, offersmany of the same advantages as a 401(k),but with the added benefit of an annualannuity option. The annuity scheduleprovides monthly payments that can be usedto maintain an enrollee’s lifestyle afterretirement or can be invested to generategreater returns on those savings.
The federal government deposits one percentof each paycheck into every employee’s TSPeven if the workers choose not to contributeto the program themselves. Employees whoelect to deposit an additional three percent oftheir paychecks into their TSP garner dollar-for-dollar matching funds from thegovernment; in addition, the governmentmatches 50 percent of contributions up to anadditional two percent of each paycheck. Assuch, federal employees who contribute fivepercent of each paycheck to their TSP morethan double their contributions; those fundsgrow exponentially over time.