The FERS retirement package offers you a way to save extra money for the future and get a tax break today through the Thrift Savings Plan.

When you join FERS, your agency sets up a Thrift Savings Plan account in your name. Every pay period your agency automatically puts in an amount equal to 1% of your basic pay. This money is called your Agency Automatic (1%) Contribution. It is not a deduction from your basic pay. It is an amount your agency contributes for you based on your basic pay per pay period.

In addition, you can contribute up to 10% of your basic pay per pay period to your Thrift Savings Plan account. If you contribute to your Thrift Savings Plan account, you will also receive Agency Matchings Contributions as follows:

• The first 3% you save each pay period will be matched dollar for dollar, and

• The next 2% you save each pay period will be matched 50 cents on the dollar.

The Thrift Savings Plan under FERS is very attractive if you're in mid-career and can contribute to your Thrift account. If you can contribute 5% of your basic pay each pay period, the Agency Matching Contributions plus the Agency Automatic (1%) Contributions you receive will add to your account an amount equal to another 5% of your basic pay for that pay period. This, coupled with the effect of compounding, may provide a significant source of retirement income. In fact, this kind of Thrift Savings Plan account balance, when added to your FERS Basic Benefit and Social Security payments, can easily produce a FERS benefit that exceeds the CSRS benefit.

Updated 26 May 1998