Reply to Amount in TSP? Age? Years in Government? GS Level?

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[quote=Anonymous][quote=Anonymous]I am new to the government, so I don't understand all the benefits ... If you work in the private sector, maxing out your 401k is critical since that is a big, possibly only depending on what happens with the social security system, part of your retirement. Maxing out the TSP contribution doesn't seem as important since FERS will provide a big (around 30%) of our income during retirement. Are people maxing out the contribution because they have extra income and want to take advantage of the tax benefits and low fees of the TSP?[/quote]

Yes.
Make sure you get your match.  After that, additional contributions are a question of tax benefits.  Given current tax rates (at your income level) and expected tax rates at retirement, does it make sense to invest pre-tax now and pay income tax later or invest post-tax into Roth.  Do you need access to money before retirement?  Then you may want to invest in regular taxable accounts.

TSP costs are low, but choices are limited.  Index fund costs aren't all that much higher than TSP costs.[/quote]

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