Definitions
Understanding key TSP terminology is essential to making informed investment decisions. Here are the most important terms every TSP participant should know.
TSP (Thrift Savings Plan)
A retirement savings and investment plan for Federal employees and members of the uniformed services. It offers the same type of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
G Fund (Government Securities Investment Fund)
Invests in a special non-marketable U.S. Treasury security issued specifically for the TSP. It offers the opportunity to earn rates of interest similar to those of long-term U.S. Treasury securities with no risk of loss of principal.
F Fund (Fixed Income Index Investment Fund)
Invests in a bond index fund that tracks the Bloomberg Barclays U.S. Aggregate Bond Index. It includes U.S. government, mortgage-backed, corporate, and foreign government bonds.
C Fund (Common Stock Index Investment Fund)
Invests in a stock index fund that tracks the Standard & Poor's 500 (S&P 500) Index, an index of 500 large to medium-sized U.S. companies.
S Fund (Small Capitalization Stock Index Investment Fund)
Invests in a stock index fund that tracks the Dow Jones U.S. Completion Total Stock Market Index, which represents small and medium-sized U.S. companies not included in the C Fund.
I Fund (International Stock Index Investment Fund)
Invests in a stock index fund that tracks the MSCI EAFE (Europe, Australasia, Far East) Index, which is made up of primarily large companies in 22 developed countries.
L Funds (Lifecycle Funds)
Professionally diversified TSP funds that automatically adjust their investment mix as you get closer to your target retirement date. They invest in the five individual TSP funds (G, F, C, S, and I).
Inter-Fund Transfer (IFT)
The process of moving money already in your TSP account from one fund to another. TSP participants are allowed two unrestricted IFTs per calendar month; after that, transfers are limited to moving money into the G Fund only.
Contribution Allocation
The percentage of your future TSP contributions that you want to go into each TSP fund. This is separate from an inter-fund transfer, which moves existing balances.
FERS (Federal Employees Retirement System)
A retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).
CSRS (Civil Service Retirement System)
An older retirement system for federal employees hired before 1984. CSRS employees may also contribute to the TSP, but they do not receive agency matching contributions.
Required Minimum Distribution (RMD)
The minimum amount you must withdraw from your TSP account each year once you reach age 73 (as of 2023). Failure to take RMDs results in a significant tax penalty.