Are you thinking of making New Year’s resolutions for 2021? Don’t forget resolutions that will impact your Thrift Savings Plan and your future retirement security. Unlike many New Year’s resolutions that require constant vigilance, you may only have to take one little step to improve your financial situation in 2021 and the future.

Your typical New Year’s resolution (let’s say losing 25 pounds by summer so that you can fit into that nice bathing suit you bought on sale) requires you to carefully watch what you eat and to engage in exercise in order to drop those pounds and firm up. Let’s look at some TSP resolutions that require less effort yet promise a great reward.


First, you can increase your contribution level (assuming that you are not already at the maximum amount of $19,500 a year, $26,000 a year if you are age 50 or older or will turn 50 in 2021). If you increase your contribution rate, it will take effect the next pay period and will continue until you change it again. You take just one step and you will continue to benefit from it. You “set it and forget it”. It stands to reason that, if you put more money in, you will be able to take more money out in the future.

Second, if you are FERS, you can ensure that you are contributing at least 5% of your salary to the TSP. Hard as it is to believe, 10% of FERS employees do not participate in the plan, and many do not contribute the 5% that is necessary to receive the full government match. I like to use the phrase “strive for five” in the retirement and TSP classes that I provide for federal employees.

Third, revisit your contribution and account allocations. If you’re still 100% in the C fund and are close to retirement, ask yourself if the level of risk you are taking is appropriate for you. You may want to talk to a financial planner who is familiar with the TSP. Or you might want to consider one to the TSP’s lifecycle (L) funds.

Fourth, be aware that the fact that you fully fund your TSP account has no impact on your ability to contribute to an Individual Retirement Arrangement (IRA). If you are a high-income individual, you may not be able to deduct your contributions to a Traditional IRA, or even contribute to a Roth IRA, but you can always make non-deductible contributions to a Traditional IRA. In 2021, you can contribute $6,000 to an IRA plus an additional $1,000 if you are 50 or older (including the year you turn 50).

Fifth, realize that you – and only you – can make a difference in your retirement income through your TSP. While your pension (either FERS or CSRS) and Social Security are mandatory, the TSP is completely voluntary. It’s up to you.

Jump into 2021 with the desire to improve your retirement financial situation!

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