TSP vs Outside IRAs In 2026: Where Should You Keep Your Money?
The decision to invest in your future is easy, but the way you invest isn’t always a clear-cut path. This is especially true for individuals who have access to exclusive options like federal employees and military personnel. Understanding your options will help you fully appreciate your standing and reveal the best way to invest. Find out where you should keep your money in 2026 after reading this comprehensive guide on the Thrift Savings Plan (TSP) and outside IRAs. Reach out to benefits advisors you can trust at Federal Educators St. Petersburg.
What’s New for TSP Accounts in 2026?
Anyone enrolled in the TSP will now have the option of making Roth conversions within the scope of their plan starting the 2026 tax year. This gives account holders in St. Petersburg more ways to invest in their retirement with minimal fees and less hassle. The trick is to know which of the two available funds works best for you:
TSP Government Securities Investment Fund
The TSP G Fund is considered the safest choice as it is closely governed by the U.S. Treasury. This is your low-risk option if you’re looking for higher security, free from drastic market fluctuations. The only tradeoff is that TSP G Funds are known to offer smaller long-term returns. So while your money will be relatively safe, your savings might not make up for future inflation or high expenses.
TSP Fixed Income Index Investment Fund
The TSP F Fund consists of a variety of investments to reach a broader market. This allows for the potential of higher returns compared to the TSP G Fund, but at an increased risk. So while a TSP F Fund is capable of combating the effects of inflation, you must have a tolerance for volatility.
When choosing your TSP in St. Petersburg for 2026, a TSP G Fund is best for those who need stable savings, while a TSP F Fund is better for those who want a diverse portfolio.
Your Best Options for Outside IRAs in 2026
Federal government employees in St. Petersburg looking for more flexibility in their investments look to outside IRAs. You can choose investments based on your risk tolerance and to supplement fixed or stable income. Take a look at the most popular outside IRA investments for 2026:
Bonds
Bonds continue to be valuable assets for investors looking for flexible ways to save. Corporate bonds can offer greater returns compared to government-issued bonds, but at a higher risk, as corporate bonds are dependent on the success of the company you purchase them from. But by opting for municipal (government) bonds instead, you can make investments exempt from federal tax.
Equity Investments
Stock-based investments can yield higher returns, which makes them a popular choice for outside IRAs. Dividend-paying stocks bring in steady income to company shareholders, as do Real Estate Investment Trusts (REITs) but with profits produced from real estate properties.
Bank and Cash Alternatives
St. Petersburg banks offer ways for federal employees to make low-risk investments that procure stable income. Certificates of Deposit (CDs) come at a fixed interest rate, with high-yield savings accounts offering an even higher rate. Mutual funds, such as money market funds, are high-liquid investments best for short-term use.
Consult With Your Federal Benefits Experts at Federal Educators St. Petersburg
There are seemingly endless options for investing your money in 2026, with both TSP and outside IRAs offering plenty of benefits as well as downsides. Federal Educators St. Petersburg is here to help you navigate your options for a comfortable retirement! Contact us today by calling (813) 568-1212 for a consultation or start with our free Thrift Savings Plan overview.