By Dallen Haws, for Haws Financial Planning

The TSP is an incredible place to invest for a number of reasons, including extremely low fees, the match, and simple investment options. The TSP is so simple that many federal employees don’t know what it is like to put money into anything else. Many FERS wonder if they should put every extra dollar into their TSP or are there other things that they should be thinking about? It’s a great question, so let’s get into it!

All FERS should be investing at least 5% of their salary into the TSP. This way, they will be taking full advantage of the government match. Because this is a free money opportunity, you should only start thinking about the next steps (that I mention below) after you are contributing at least 5% annually.


The next thing to worry about is making sure to pay off debt. It doesn’t make any sense to be investing more than 5% of your salary into the TSP while you are still paying 20% on your credit card debt. The average stock market return over the last 50 years has been 10% so the numbers just don’t add up. Prioritize getting out of debt so that you can free yourself from the past and start planning for the future.

After you have your debts under control, make sure you have the right insurance. It is not uncommon for an accident or illness to wipe out someone’s savings that they spent years accumulating. If you don’t have the right insurance, it may not matter how much you save. This could include car, home, life, or liability insurance. Insurance is not a popular topic, but it is a necessary part of just about every good financial plan.

I wish I could give blanket answers on exactly how much insurance is right for you but it just depends. Everyone’s situation is different and insurance needs can vary highly. For example, it often makes sense for the provider of a young family to have plenty of life insurance in case of an untimely death. This way, his family will be provided for no matter what happens. The amount of life insurance will depend on how many years of replacement income that family will need before other arrangements can be made.

You have to educate yourself about what insurance options are available, and then apply the things you learn to your life. It is up to you to make sure that you and your family are prepared for whatever life brings.

Once your insurance needs are covered, it may make sense to begin investing again. This could be back in the TSP, an IRA, or just a regular brokerage account. During your career, it is hard to beat the TSP when it comes to investing. Retirement always comes faster than you think. If you haven’t already, start investing as much as you can today so that you don’t have the classic regret; “I wish I had started earlier”.

See also, Taking Steps toward Retirement, Are you Ready?

Dallen Haws is a Financial Advisor who is dedicated to helping Federal Employees live their best lives. He loves talking about the security and freedom that a strong financial plan can bring to our lives. He has seen how good information can change everything.  You can learn more about him at https://planyourfederalbenefits.com/.

TSP Investors Handbook, New 6th Edition