The Thrift Savings Plan will see some big changes when provisions from the TSP Modernization Act kick in. The legislation introduces new options for withdrawals, contributions, and access. Tammy Flanagan, senior benefits director at the National Institute of Transition Planning, says that the new options offer better benefits for federal employees.
“Employees will now when they retire have a lot more flexibility in what they do with the money they’ve saved throughout their career, so they won’t be stuck with making one decision and have to stay with it, Flanagan said. “Now they can go back and forth and peck at it throughout their retirement life, which I think they’re going to like.”
Greg Klingler, director at GEBA Wealth Management, says that employees could be overwhelmed with investment options for their retirement.
“The typical government employees that we work with are incredibly intelligent. But, they don’t specialize in investments. Maybe people get a little too cute with some of their plans and their strategies that they try to do. Giving more options can lead to more of that,” Klingler said. “With that being said, these options are standard across most qualified plans like the 401k’s. Giving them at least what the 401k people in the private sector are getting was really important.”