Is Your TSP Ready for the New Year?

By: Karen Schaeffer, CFP®

January 2020
What’s your New Year’s resolution? Need one that you can really accomplish instead of that exercise goal we’re already making excuses about? Look no further than There’s a great goal there for everyone.

Wish you had a bigger TSP account?

  • When the cost of living allowance kicks in, resolve to take 1% of it and increase your TSP contribution. You’ve never seen that money in your paycheck before, you can’t possibly miss it. On a $60,000 annual salary, we’re talking $600/year or roughly $23/paycheck. Quick, before you start treating yourself to a daily caramel macchiato, increase your contribution to TSP. That little painless step could mean an extra $175,000 30 years down the road if the rate of return averaged 7%. Of course, rates of return can’t be guaranteed, and vary over time but this is certainly worth investigating, right?!? Check out those calculators on and get motivated.
  • Born in 1970? Resolve to start making catch-up contributions.  These poorly named contributions have nothing to do with making up for missed contributions but are simply a way for smart people of a certain middle age – 50 and older – to put additional money in their TSP account. You know where to go for details:
  • Have too much money in the G Fund but are afraid the stock fund prices (C, S, and I) are too high? Been thinking that for a few years? Resolve to give up the notion that you will wake up one morning knowing it’s a perfect day to move into the stock funds and actually do it.  A better idea, start moving small amounts, through inter-fund transfers, and/or changing the allocation of money coming out of future paychecks so more goes to stock. The mechanics are spelled on our favorite website,
  • Ever wonder if you’re investing in the right TSP funds? Struggle with a tendency to panic sell on bad news or just never get around to making thoughtful decisions? Wish you could just set it and forget it? Your 2020 resolution – find the Life Cycle Fund with your name on it.  Designed with you in mind, these portfolios stay balanced automatically and move slowly from mostly stocks to mostly G fund over time. Log onto to learn the details and then pick the L fund that works for you.

Already contributing the maximum to your TSP and confident with your allocations?

  • Resolution: Keep up the good work by staying current.  Be sure you’ve increased your contributions to take advantage of the new higher limits for 2020, $19,500 and $6,500 for the catch-up. Welcome the brand new 2060 fund with its 99% allocation to stock and be on the lookout for a new and improved I fund which will include a much more diversified option than the current EAFE. And if you’re getting close to retirement, be sure to become familiar with the new and improved withdrawal options and the pushed back to age 72 required minimum distribution change. So much going on, so little time to research? It’s all there at

Stick with any of these resolutions and you’ll have Happy New Year for years to come. Cheers!

Karen Schaeffer. CFP® is the Managing Member and Co-founder of Schaeffer Financial LLC, a financial consulting firm in suburban Washington, D.C. She has been advising clients for over thirty-five years and has developed a diverse client base including professional women, Foreign Service Officers, foreign nationals, and Federal government employees.  She has been presenting seminars for NITP for over 25 years.

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