Broker Commissions and Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
Fidelity $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Charles Schwab $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0
Vanguard $7-$20 $8-$35 $30 + $1.50 per contract $20* $20*

Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
Ally Invest
Fidelity
Charles Schwab
Etrade
Vanguard


Introduction to Thrift Savings Plan

The Thrift Savings Plan (TSP) is a retirement plan that is available to Federal employees and members of the uniformed services of the United States. The plan offers savings and tax benefits that are similar to those that are offered by private companies and corporations. For employees that were hired after January 1, 1984 and whose, retirement benefits are covered by the Federal Employees Retirement System (FERS) the plan provides 401(k) benefits. FERS employees receive an automatic employer contribution that is equal to 1% of their gross salary and a 4% matching contribution. FERS employees have the option of having their contributions deposited into a traditional IRA or a Roth IRA.

For employees that were hired before January 1, 1984 and whose, retirement benefits are covered by the Civil Service Retirement System (CSRS) their TSP accounts are optional and operate like a traditional IRA retirement plan. All contributions that are made to a TSP for a CSRS employee are made by the employee (no mandatory or matching employer contributions), and they are usually made through payroll deductions. The contributions are generally tax deductible which means that employees can reduce their adjusted gross income by the amount of their contribution. CSRS employees use their TSP’s to supplement their CSRS annuity or military retired pay.


Thrift Savings Plan Contributions

Making contributions to a TSP account is relatively easy. Account holders simply complete a form, which designates the amount of the contribution and how the contribution is to be invested. Deciding how to invest in a TSP is also easy. TSP accounts are self-directed, which means that account holders are provided with a wide range of investing options. The options range from safe and secure U. S. Treasury securities to index funds, which are comprised of domestic and international stocks. If an account holder cannot decide on an investing option, the money will automatically be put into the G Fund. The G Fund is the Government Securities Investment Fund.


Thrift Savings Plan Fund Options

There are six types of funds that TSP account holders can choose from. Accounts holders are provided with information about each funds objectives, investment Strategies, and potential risk and rewards.

The six funds are:

The Lifecycle Funds: There are five Lifecycle funds which are “tailored to meet investment objectives based on various time horizons.”

The G Fund: The G Fund is comprised of government securities. It objective is to provide a safe investment that will provide a rate of return that is higher than the rate of inflation.

The F Fund: The F Fund is the Fixed Income Index Investment Fund. The Fund is comprised of a “broad index representing the U.S. bond market.”

The C Fund: The C Fund is comprised of common stocks in the S&P 500 Index.

The S Fund: The S Fund is the Small Cap Stock Index Investment Fund which is comprised of relatively small market cap stocks that are not included in the S&P 500.

The I Fund: The I Fund is the International Stock Index Investment Fund which is comprised of international stocks.


Fund Details and Information

While a funds history is certainly no guarantee of its future performance, it is does give investors a starting point from which to gauge a fund’s potential earnings. That is why the Thrift Savings Plan provides account holders with the details and daily share price history of every fund that it maintains. For instance:

Average Annual Fund Returns over 1, 3, 5, and 10 years.


Average Annual Returns

 

L Income

L 2020

L 2030

L 2040

L 2050

G Fund

F Fund

C Fund

S Fund

I Fund

1-Year

4.77%

10.42%

12.61%

14.27%

15.85%

1.47%

4.29%

16.07%

18.57%

18.62%

3-Year

4.24%

7.03%

8.09%

8.83%

-

2.24%

6.29%

10.90%

13.92%

4.13%

5-Year

3.14%

2.44%

2.32%

2.01%

-

2.69%

6.06%

1.71%

4.22%

(3.30%)

10-Year

-

-

-

-

-

3.61%

5.25%

7.12%

10.79%

8.39%


Calendar Year 2008–2013 and 2014 year-to-date returns.


Calendar Year Returns

 

L Income

L 2020

L 2030

L 2040

L 2050

G Fund

F Fund

C Fund

S Fund

I Fund

2008

(5.09%)

(22.77%)

(27.50%)

(31.53%)

-

3.75%

5.45%

(36.99%)

(38.32%)

(42.43%)

2009

8.57%

19.14%

22.48%

25.19%

-

2.97%

5.99%

26.68%

34.85%

30.04%

2010

5.74%

10.59%

12.48%

13.89%

-

2.81%

6.71%

15.06%

29.06%

7.94%

2011

2.23%

0.41%

(0.31%)

(0.96%)

-

2.45%

7.89%

2.11%

(3.38%)

(11.81%)

2012

4.77%

10.42%

12.61%

14.27%

15.85%

1.47%

4.29%

16.07%

18.57%

18.62%

YTD

2.11%

5.00%

6.28%

7.23%

8.07%

0.38%

0.01%

10.61%

13.09%

4.34%



The Thrift Savings Plan also provides account holders with quarterly account statements and daily updates on the details of their individual accounts. The updates are precise and easy to understand.


Conclusion

The Thrift Savings Plan is a safe and convenient way for federal employees to save for their retirement. For FERS employees, it provides a way to grow a 401K retirement account with the benefit of employer contributions. For CSRS employees, it provides a way to grow a supplemental retirement account while deferring taxable income until retirement.

If you would like to have more investing options than offered through TSP, there are a number of excellent traditional brokerage companies on the market.


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