The TSP mutual fund window is a new option that started in the summer of 2022. It allows TSP participants to choose from over 4,000 mutual funds with the goal of providing increased investment flexibility to investor’s portfolios.
If you have more than one TSP account, such as a civilian account and uniformed services account, and you want to invest money from each account in the mutual fund window, you need to establish two separate mutual fund window accounts. This means that eligibility requirements and associated fees also apply separately to each account.
Investment Options
The introduction of the mutual fund window now provides Federal employees the ability to choose from over 4,000 mutual funds. It does not offer individual stocks, bonds, or exchange-traded funds (ETFs).
Eligibility for the Mutual Fund Window
There are certain requirements to participate in the mutual fund window:
- Your initial transfer to the mutual fund window must be $10,000 or more but may not be more than 25% of your total TSP savings.
- You must have at least $40,000 in your TSP account to ensure that your initial transfer isn’t more than 25% of your total TSP savings.
- You may not invest more than 25% of your total account balance in the mutual fund window at any time.
Fees for the Mutual Fund Window
TSP participants who choose to invest through the mutual fund window pay fees that do not apply to participants who invest only in TSP funds.
- $55 annual administrative fee
- $95 annual maintenance fee
- $28.75 per-trade fee
- Additional operating expenses dependent on the mutual fund chosen
Steps to Use the Mutual Fund Window
- Create a mutual fund window account
- Transfer funds into the mutual fund window. To move money in and out of your mutual fund window account, you’ll need to perform a fund transfer. Fund transfers, along with reallocations are limited to two transactions each month. The only exception is that there are no limits on fund transfers and reallocations if you’re moving money into the TSP G Fund.
- Use the filter function to determine which funds you would like to invest in. Make sure to review the fund’s prospectus to understand the fund’s investment objective and operating expenses.
Important Information on Contributions, Withdrawals, and Loans
You are unable to contribute directly into your mutual fund window account. Loans, distributions, and withdrawals are prohibited from being taken directly from your mutual fund window account. If you need to access the money in your mutual fund window account, you must sell the investment and then transfer back to your TSP before taking the withdrawal.
Retired or Left Federal Service
Have you retired or recently left Federal service? If so, you are probably wondering what you should do about the TSP. Should you leave your retirement funds with the Thrift Savings Plan (TSP) or transfer into a Individual Retirement Account (IRA)? It is an important question to ask. We look at the Pro’s and Con’s here: Should You Transfer Out of Thrift Savings Plan (TSP)?
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we focus on retirement planning for federal employees. Learn more about our process designed for the career federal employee.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
