The Thrift Savings Plan’s (TSP) open season is just around the corner. But instead of two scheduled open seasons as in prior years, the TSP will be open indefinitely starting April 1.

Thousands of Sailors Navywide have already invested in life after the Navy through TSP, but some may not be fully informed about the military’s equivalent of the

civilian 401(k) retirement plan. 

ENROLLMENT

Enrollment in the TSP is more convenient than it ever has been. The easiest way is to visit http://www.dfas.mil/mypay{{PERIOD}} Among many other interactive financial options, the Defense Financial Accounting System (DFAS) web site offers enrollment or adjustment of the Sailor’s TSP account in just a few clicks of a mouse.

INVESTING

This year, Sailors can invest up to 10 percent of their basic pay and as always, 100-percent of any special or incentive (including reenlistment or other bonuses) pay. The only stipulation being the maximum annual contribution can’t exceed $14 thousand.

Since all investments are deducted prior to the Sailor receiving his pay, every dollar invested is tax-free.

‘G’ Fund - Government Securities Investment Fund

According to the IDPM Group, a privately owned company that keeps federal employees involved with their retirement benefit futures, the “G” Fund is generally the “safest and most predictable investment.” A Sailor’s contribution is turned into U.S. Treasury Securities. Basically, securities are loans made to the government to fund government projects.

According to finance experts the upside to the “G” Fund is that it’s low-risk. It’s downside is based on the same theory. With a low chance for default, there’s also a low interest percentage to be repaid, which means less money for the investor in comparison to other funds.

‘F’ Fund—Fixed Income Index Investment Fund

The “F” Fund is similar to the “G” fund in that the investment offers securities, but the annual interest rate is “fixed”. 

The downside is the interest rate won’t rise and like the “G” the return is commonly lower than other TSP investments.

‘C’ Fund—Common Stock Index Investment Fund

The first of TSP’s stock-based investments, the “C” Fund, is invested into an array of America’s 100 largest corporations.

The benefit of the “C” fund is the chance for higher returns that successful stocks may bring.

The downside is the fund is strongly based on the nation’s economy and recession could mean not only no gain for TSP investments, but even losses.

‘S’ Fund - Small Capitalization Stock Index Investment Fund

The “S” Fund invests in America’s smaller corporations. It purchases stocks representing various industries whose total stock worth is under $1 billion.

The chance for profit, like in all TSP’s stock investments, is greater than the security-based investments. With more shares owned, Sailors can claim a larger stake in each company, bringing a larger return if the companies are successful.

The downside is that smaller company stocks are typically more volatile than their larger corporate counterparts.

‘I’ Fund - International Stock Index Investment Fund

The “I” Fund is the international version of the “C” Fund, tracking the gains and losses of large corporations in Europe, Australia and the Far East.

The benefits and pitfalls of the “I” Fund are based on the success of the American dollar.

For example, the stock value of an Italian company is valued in Italian lira, not American dollars. The better or worse the dollar does against the lira, the more or less shares will be purchased, and the gain and loss is based on the success of the invested company.

ONCE YOU’RE IN

Once a Sailor has enrolled in the TSP, he’ll receive a Personal Identification Number (PIN) in the mail.

That PIN, along with a social security number will give the Sailor access to their account at http://www.tsp.gov, or calling the TSP Thriftline at 1-504-255-8777. 

GETTING OUT

Though the TSP’s main mission is financial stability after retirement, it is not limited to career Sailors.

After a Sailor’s enlistment is complete, he can option for the balance of his TSP account in either a lump sum, a series of monthly payments, in a life annuity, or any combination of the three.

If a separating Sailor wants to continue to invest for his retirement, he can also roll all, or part of his balance into a corresponding Roth IRA account (attainable at most local banks) or the civilian version of the TSP, an employer’s 401(k) program.

For more information on the thrift savings plan, visit http://www.tsp.gov To access your “My Pay” account, go to http://www.dfas.mil/mypay.