What Is the TSP Mutual Fund Window?

What Is the TSP Mutual Fund Window?

 

The Thrift Savings Plan (TSP) program recently received an upgrade. Federal employees will be pleased to know that those wanting to broaden their investment portfolios may do so with the newly opened Mutual Fund Window option. Federal Educators look at this exciting addition that rolled out this past June to all TSP participants.

 

Summer was a season of change for many, especially for those federal employees enrolled in a Thrift Savings Plan program. The Federal Retirement Thrift Investment Board launched the Mutual Fund Window program for all TSP participants. This voluntary program is designed to give TSP participants greater investment flexibility. Those interested can invest in 5,000 additional mutual funds within 300 mutual fund families offered by Fidelity, T. Rowe Price, and Vanguard. Mutual funds like these are pools of collective money invested and actively managed by a portfolio manager. They differ from current TSP funds, which are passive investments and incur low costs. The Mutual Fund Window adds both cost and complexity to participants wanting a bit more edge.

 

Here’s how it works. With most mutual funds, this flexibility comes with fees. Participants will receive a $55 annual fee for administrative expenses, $95 annual maintenance fee, $28.75 per trade fee, and additional fees specific to chosen mutual funds. If you choose to invest through the Mutual Fund Window, the initial investment must be at least $10,000 but no more than 25% of your total TSP account may be invested. For funds with multiple classes, the lowest expense ratio class is offered. New funds may be contributed up to twice monthly.

 

Investing in the Mutual Fund Window might not work for everyone’s financial situation. The complexity of these funds requires more attention, total cost to invest in current TSP funds is among the lowest available in the retirement plan selections, and there are sizable fees to participate.

 

If you are unsure whether the Mutual Fund Window is a good fit for your financial plans, call Federal Educators at (813) 755-7037 or request a free benefits analysis today. We can provide your family with resources and tools tailored to make the most of your retirement!