Quick Decision
You do expect to be able to save very much extra money for your retirement for a long time
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.
Your own contributions and your Agency Matching Contributions as well as the earnings attributed to these contributions belong to
you right away. There is no waiting (vesting) period. You are vested in the Agency Automatic (1%) Contributions and attributable
earnings after you have completed 3 years of Federal (generally, civilian) service (2 years for some non-career participants).
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.
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