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    Explain The Thrift Savings Plan

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    Explore the Thrift Savings Plan (TSP) web site at http://www.tsp.gov .

    Let's say you'd like to enroll in the TSP-explain why and what funds will you choose?(8-11 sentences).

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    Solution Preview

    The Thrift Savings Plan is a defined contribution plan for Federal employees. It provides for a match of up to 5 percent of the employee's contributions. (In fact, all employees receive an automatic 1 percent match; there is a 1 percent match for each 1 percent of salary contributed to 3 percent; there is then a .5 percent match for each 1 percent contributed up to 5 percent of salary.) For a person contributing 5 percent of their salary, this match results in an immediate 100 percent return on their investment. This match also buffers them in a market downturn (since their loss is mitigated by the value of the remaining match dollars they did not have to contribute) and ...

    Solution Summary

    This solution explains the Thrift savings Plan, discusses the fund choices within it in detail, and discusses what fund a college student would invest in.