Easy Ways Guaranteed to Reduce Your TSP Balance


So many articles written (here and on other sites) are focused on maximizing Thrift Savings Plan balances; from the contrarian viewpoint, what are easy actions or activities to reduce your balance instead?

  • Invest for safety and ease of selection – aka, put all your “eggs” in the G Fund “basket”
    • Or, split between F and G only
  • Keep your contribution steadily low – never adjust for bonuses or promotions
  • Ignore free and easy money. Who cares if your agency will match the first 5% of your salary?
  • Reduce your contribution from 3% (for new hires).  Why save for retirement with any personal funds?
  • If over 50, NEVER save with the catch-up contributions.  That $5,000 is better spent today!
  • Chase “easy” returns (do as many interfund transfers as the Board will allow, currently two/month)
  • Loan yourself money – borrow for a house AND emergencies
    • Repay only the loan, and not invest to the match


While it may be silly to follow the above ideas, only 10% of TSP account holders have balances of $250,000 or more according to Mike Causey’s column. Generation X individuals (like myself) have been admonished, if selecting a ballpark figure to accumulate, to use one million dollars as our goal but millennials are being urged to use two million in recent articles, such as the link provided.

Additionally, some of the recommendations being pushed by the accredited experts are unusual: “Accumulating $2 million for retirement is a good goal for people to strive for and can be achieved by saving $20,000 a year for 30 years and praying for a 6% average market return,” said Patrick Morris, CEO of New York-based HAGIN Investment Management. Who is Patrick suggesting we pray to: Lady Luck and/or Mammon?

Whether saving via traditional (tax break now) or roth (tax break at withdrawal, subject to tax law then), *I* suggest that you do NOT do as I say above (but do as I *DO*: save past the 5%; if taking loans, pay loan and make new contributions; rebalance twice or quarterly, not more often).

What are your TSP recommendations? Leave some in the comments below.

Ramona Winkelbauer is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.

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