Here’s another “pop quiz” to test your knowledge of the Thrift Savings Plan.  There are no IRA related questions this time, and we have added some multiple choice questions to go along with the True/False ones.

1)    True or False: Participants in the hybrid CSRS Offset retirement system do not receive agency matching contributions to their TSP.


True.  Even though CSRS Offset participants contribute to Social Security, the fact that they also contribute to the Civil Service Retirement System precludes their getting matching contributions.  Among civilian TSP participants, only FERS employees receive an agency match.  Among uniformed service participants, those in the blended retirement system (BRS) also receive matching participants.

2)    The interest rate for TSP loans is based on:  A – the prime rate; B – the rate of return of the TSP’s G Fund; C – The LIBOR rate;  D – the benchmark rate set by the Federal Reserve Bank of New York.

B – the interest rate for TSP loans is adjusted monthly based on the return of the G Fund.  You can find the current loan interest rate, along with other rates, on the TSP website at https://www.tsp.gov/whatsnew/Content/currentLimitsAndRates.html

3)    True or False: The TSP’s elective deferral limit increases by $500 each year.

False.  Though increases to the elective deferral limit must be in increments of $500, there is no automatic increase.  There have been years when there was no increase, and years when the increase was more than $500.  The TSP announces the increase (if any) shortly after the Internal Revenue Service announces the elective deferral limit in mid-to-late October.

4)    True or False:  You can make catch-up contributions to the TSP when you are age 49, as long as you turn 50 before the end of the year.

True.  Both IRAs and company plans like the Thrift Savings Plan allow catch-up contributions beginning in the year one turns 50.

5)    True or False:  Special Category Employees have different rules regarding TSP withdrawals than do regular employees.

True.  Because SCEs have mandatory retirement and are required to retire at an age younger than regular employees, rules are different for them when it comes to withdrawals.

6)    The following types of employees are considered to be Special Category employees:  A – Law Enforcement Officers; B – Customs and Border Protection Officers; C – Firefighters; D – All of the above.

D – All of the above, and more, occupations are considered to be special category employees and have special rules regarding retirement and the Thrift Savings Plan.

7)    True or False:  Any money distributed from a separated employee’s Roth TSP balance is tax free.

False.  Though it is usually true that post-separation Roth TSP withdrawals are tax free, unqualified withdrawals are not.  An unqualified withdrawal from the Roth balance of your TSP would be one that was taken when you were younger than age 59 ½ and/or had your Roth TSP account for less than 5 years.

8)    Which of the following is true if you are still working at your federal job at age 59 ½?  A – You cannot take a withdrawal from the TSP because you are still working.  B – You are allowed to take a one-time “age-based” withdrawal.  C – You may take up to 4 “age-based” withdrawals per year.

C – The TSP Modernization Act allows still working employees who are at least 59 ½ the opportunity to take up to 4 withdrawals per year.  Prior to the implementation of the TSPMA last September, only 1 age-based withdrawal was allowed.

9)    True or False: Members of the Federal Retirement Thrift Investment Board are appointed by the President.


10) TSP funds that have a target date (e.g., 2025, 2030, etc.) are called:  A – Target date funds; B – Time constrained funds; C – Lifecycle funds; D – Expected retirement funds.

C – Lifecycle funds.  Although almost everyone else in the investing universe calls then target date funds, the TSP decided to call them Lifecycle (L) funds.

Pop Quiz: Test Your Federal Retirement Knowledge

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