Many of our clients have called because the news is blaring that the federal government has maxed out its credit again, and seems to be using our Thrift Savings Plan to bail them out again.

Treasury Secretary Janet Yellen began “extraordinary measures” including: (1) redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund, and (2) suspending reinvestment of the Government Securities Investment Fund (G Fund) of the TSP.

Here is what you need to know: the G Fund money is legally protected. By law, the Treasury is required to make the G Fund whole — with interest — once the debt ceiling crisis is resolved. This has happened before and your G Fund balance has always been protected. If you have questions about how this situation may affect your TSP, please give us a call.