After-Tax Contributions — Contributions that are made after taxes have been taken from pay (i.e., Roth)

Automatic Contributions — Contributions deducted from pay and added to a TSP account by an employer.
 

Annuity — Guaranteed monthly income for the life of the TSP participant or survivor after separating from federal service.

Asset Allocation — The process of choosing among different kinds of assets such as stocks and bonds that will be included in an investment portfolio.

Beneficiary — The individual or entity that receives your TSP account balance (or a portion of it) at your death.

Bond — A debt security issued by a government entity or a corporation to an investor from whom it borrows money.

Catch-Up Contributions — Contributions which are made via payroll deductions by a participant age 50 or older, who are permitted to exceed the Internal Revenue Code (IRC) elective deferral limit.

Contribution — A deposit made to the TSP by a participant through payroll deduction or on behalf of the participant by his or her employer.

Credit for Qualified Retirement Savings Contributions — IRS Form 8880, used to claim tax credits for traditional or Roth IRA contributions, 401(k) contributions, and other retirement investments. The form includes instructions and limitations.

Currency Risk — The risk that the value of a currency will rise or fall relative to the value of other currencies.
 

Elective Deferral Limit — An annual dollar limit, established under the Internal Revenue Code (IRC), that limits the contributions a participant can elect to make to plans like the TSP.

Eligible Employer Plan — A plan regulated under Internal Revenue Code (IRC), including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan.

Eligible Rollover Distribution — A distribution from the TSP that is eligible to be transferred or rolled over to an IRA or eligible employer plan.

Fixed Income Investments — Generally refers to bonds and similar investments (considered debt instruments) that pay a fixed amount of interest.

Index — A broad collection of stocks or bonds which is designed to match the performance of a particular market.

Inflation Risk — The risk that investments will not grow enough to offset the effects of inflation.

 

In-Service Withdrawal — A disbursement made from a participant’s account which is available only to a participant who is still employed by an agency of the federal government, including the uniformed services.
 

lnterfund Transfer (IFT) — A redistribution of different TSP funds within an account.

IRS Form 8880 — See “Credit for Qualified Retirement Savings Contributions”.
 

Market Risk — The risk of a decline in the market value of stocks or bonds.

Matching Contributions — Contributions up to a certain limit made by an employer to TSP accounts for participants who have also contributed their own money.

Post-Separation Withdrawal — A distribution from a participant’s account which is available only to participants who have left federal service or the uniformed services.

Prepayment Risk - The probability that if interest rates fall, bonds that are represented in the index will be paid back early, thus forcing lenders to reinvest at lower rates.

Qualified (Earnings) — Roth earnings are qualified (i.e., paid tax-free) when two conditions have been met: (1) five years have passed since Jan. 1 of the calendar year in which you made your first Roth contribution, and (2) you have reached age 59/, become permanently disabled, or have died.

Required Minimum Distribution (RMD) — The amount of money that the IRS requires be distributed to a participant each year after the participant has reached age 70.

Risk (Volatility) — The amount of change (both up and down) in an investment's value over time.

Roth Contributions — Contributions from pay that has already been taxed (or from tax-exempt pay) and that has been deposited into a Roth balance.

Roth IRA — An individual retirement account that provides tax-free earnings.

Securities — A general term describing a variety of financial instruments, including stocks and bonds.

Stocks — Equity securities issued as ownership in a publicly held corporation.

Tax-Exempt Contributions — Contributions of money to a TSP Traditional balance that will never be taxed.

Time Horizon — The future point when withdrawals from an account are expected to begin.

 

Traditional IRA — A traditional individual retirement account or an individual retirement annuity with contributions from pay that has not yet been taxed. Also referred to as “tax-deferred,” “pre-tax,” or “non-Roth” contributions.

Vesting — The time in service a TSP participant must have to keep automatic contributions and earnings.