There are two ways we can change our Thrift Savings Plan investments while we are still employed by the federal government. One of those ways carries over into retirement and one does not. They two ways we can change our investments are: 1) By changing our contribution allocation; and 2) By making an interfund transfer. It’s easy for those who are not familiar with the TSP to get these two confused, so this article is designed to help tell them apart.
Your contribution allocation deals with how, and how much, you are contributing to the Thrift Savings Plan and applies only to those who are eligible to make contributions (i.e., pretty much all civilian employees and uniformed service members). When you change your contribution allocation you can do one or two things.
First, you can change how much you are contributing to the TSP. If you are currently contributing 10% of your salary and want to contribute 12% from here on, you up the amount that you are putting into the TSP by increasing your contribution allocation.
Second, you can change the funds into which your contributions are going. If you are currently contributing to the G Fund and decide that it will make more sense to move to the F Fund, you just change the percentage of each contribution that goes into each specific TSP fund.
When you make an interfund transfer, on the other hand, you are not changing how money goes into the TSP, you are re-allocating money that is already in the Thrift Plan. Let’s say that you were 100% C Fund in January and a little bird landed on your shoulder and told you to move to the G Fund because a crash was coming. You would make an interfund transfer on the TSP website and move your C Fund money into the G Fund.
To make an interfund transfer and/or change your contribution allocation, you must go to the newly updated Thrift Savings Plan website and log in to your TSP account. You will be required to set up two-factor authentication if you have not already done so. Once you are directed to your account you will click on either contribution allocation or interfund transfer. The information you fill out is self-explanatory.
If the change you make is received by 11:00 AM Eastern time, it should be processed the same day as it was submitted. Like many things regarding the TSP, it’s a lot easier and quicker to make changes today than it was in the early days.