Your TSP Account: 

What to Think About When Nearing 

Retirement or Considering Leaving 

the Government

October 6, 2020

Alan Sorcher Randy Urban

Tom Manganello Paul Saulski
SEC Disclaimer

The SEC’s Office of Investor Education and 

Advocacy is providing this information as a 

service to investors. This presentation is not a 

statement of official SEC policy, a legal 

interpretation, or investment advice.

Your TSP Account

What to Think About When Nearing 

Retirement or Considering Leaving the 

Government
Investor.gov
Risk, Fees and Fraud 

in Investing

Considerations When Retiring or 

Leaving the Government

October 6, 2020 Tom Manganello and Paul Saulski
All Investments Have...
Short-Term Goals Long-Term Goals

Lower Risk Higher Risk

Investment Risks/Returns

• Bank Accounts

• CDs

• Money Markets

• TSP G Fund

•Government

• Municipal

• Corporate

• TSP F Fund

•Individual Stocks

• Stock Funds

• TSP C, S and I Funds
Asset Allocation

Asset allocation involves dividing an investment 

portfolio among different asset categories, such 

as stocks, bonds, and cash

Sample Portfolio

Stocks

Bonds

Cash
Time: Friend or Foe?

U.S. Large Stock Performance (1926-2019)
TSP – Risk and Returns
2065 2045 2025

Risk allocation changes based on your

expected retirement date

TSP L Fund Asset Allocations
Managing Risk

Manage risk with asset allocation and 

diversification
Diversification with Mutual 

Funds and ETFs 

Pools of money invested by a fund in stocks, bonds or 

other securities 

Benefits of funds:

• Diversification

• Professional 

management

• Affordability

• Liquidity
Fees

All investments have fees. And they matter.
Growth of $100k Invested Over 

20 Years Depending on Fees

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Year 5 10 15 20

TSP

portfolio

with .042%

annual fee

Index

portfolio

with .13%

annual fee

Managed

portfolio

with .66%

annual fee

TSP: $384,000

Index: $377,000

Managed: $339,000
Five Questions to Ask About 

Fees 

• What are the total fees to purchase, 

maintain and sell this investment?

• Are there ways to reduce or avoid some of 

these fees?

• Are there similar products that I can 

purchase that have lower fees? 

• How much does this investment have to 

increase in value before I break even?

• What are the ongoing fees to maintain my 

account?
www.finra.org/fundanalyzer

FINRA Fund Analyzer
The Thrift Savings Plan (TSP.gov) is a defined 

contribution plan for federal/military employees, 

similar to a 401(k) plan

Why Participate in TSP?

• Easy to enroll

• Saving is automatic

• Match up to 5% (free money)

• Tax benefits

• Low fees/expenses

• Portable (stays with you if you leave gov’t)

Thrift Savings Plan (TSP)
TSP: Two Ways to Contribute

Retirement accounts have tax advantages:

Traditional Roth

- Your money goes in 

before taxes

- Lowers your taxable 

income

- Your money will be 

taxed when you 

withdraw it

- Your money goes in 

after taxes

- Your money will be 

tax-free when you 

withdraw it 
Traditional or 

Roth

$19,500

(50+ may add $6,500)

2020 TSP or 401(k) 

Contribution Limits
When You Leave the Government

• Leave all or some of your money in the TSP

• Roll your TSP account into your new 

employer’s plan or an individual retirement 

account (IRA)

• Roll retirement accounts into your TSP 

account

• Take a lump sum distribution -- WARNING: 

You will owe taxes and pay a penalty if taken 

before age 591⁄2
Tips to Avoid Fraud
Unsolicited Offers

The salesperson or promoter approaches 

you, not the other way around

• Examples:

- Cold call

- Email

- Social media

- Radio and newsletters

- Direct mail

- Free dinner seminar

• How to respond: Ignore them, and if you 

don’t, always do your own research
Red Flags of Fraud

• Sounds too good to be true, such 

as promises of high returns with 

little or no risk

• Pressure to buy RIGHT NOW

• Lack of documentation, such as: 

- No public filings 

- No statements 

- No prospectus

• Unlicensed or unregistered salesperson 

GUARANTEED

RETURNS!

HUGE UPSIDE, 

NO RISK!
Check Any Investment 

Professional

Check on Investor.gov:

• License/registration

• Employment history

• Important disclosures
Get the Full Report

NAME

BARKLEY & HOWELL
Disclosure Events

9

Disclosures

22 Years of Experience

8Firms

3

Examinations

2

Licenses

NAME

BARKLEY & HOWELL

ANYTOWN, USA
Research Any Investment 

Product

Check EDGAR:

Is the product registered 

with the SEC?

• Scams often involve 

unregistered companies

• EDGAR has important 

information about companies
EDGAR
Fraud Targeting 

Federal Employees

SEC brought an action against Federal Employee Benefit 

Counselors (FEBC), whose mission was purportedly “to 

help” federal employees optimize benefits. SEC alleges:

• FEBC fraudulently induced federal employees to roll 

over holdings from TSP accounts into private variable 

annuities.

• FEBC created false impression it was affiliated with 

or approved by the federal government

• FEBC deceived investors about fees and 

attractiveness of annuities

SEC Press Release # 2017-135, July 31, 2017
Other Steps to Protect Yourself

• Verify anyone claiming to be from the 

government (call the agency)

• Don’t pay for investments with credit cards, 

gift cards, or wires sent overseas

• Don’t speak to unknown salespeople – and 

if you do, never share any personal 

information

• Don’t pay an upfront fee in order to claim 

proceeds, stock, or winnings
SEC Resources
Investor.gov
Investor.gov Calculators
• How to Use the Investment Professional 

Search Tool on Investor.gov

• Covid-19 Early Withdrawals from 

Retirement Accounts – Be Careful of 

Fraudsters and Other Bad Actors Targeting 

Your Retirement Savings

• Five Red Flags of Investment Fraud

• Look Out for Coronavirus-Related 

Investment Scams

• Initial Coin Offerings

Investor Alerts and Bulletins
Office of Investor Education and Advocacy

U.S. Securities and Exchange Commission

Investor Assistance: 800-732-0330 | help@sec.gov

Investor.gov

www.facebook.com/SECInvestorEducation

@SEC_Investor_Ed

Outreach@SEC.gov

Let’s Stay in Touch...
Contacting the TSP