Recent changes to the Thrift Savings Plan, or TSP, give savers more investment options and easier access to their accounts.

The TSP is a retirement account that is similar to a 401(k) plan; it is also at the heart of the Blended Retirement System (BRS). Service members who joined after January 2018 were automatically enrolled in the BRS. Other service members could join the BRS or choose to retain the legacy retirement plan. 

The federal government automatically contributes one percent of a service members' base pay to their TSP under BRS and then matches up to an additional four percent to the service members' contributions. If one contributes five percent to a TPS, the feds throw in another five percent.

Now, the recently announced changes to the TPS provide a new mutual fund window that offers savers thousands of mutual fund choices. But there is a cost. There is a $55 annual fee, a $95 annual maintenance fee, a $28.75 fee per trade, and any other additional fees and expenses that the mutual fund may have.

In an Oct. 9 article by Karen Jowers entitled "Big changes in your savings plan have taken effect," she points out that these fees are being levied to avoid indirectly increasing costs for TSP participants who do not use the mutual fund window.

She added that if service members invest through the mutual fund window, their initial investment must be at least $10,000, and they cannot invest more than 25 percent of their total TSP account into a mutual fund. This means that there must be at least $40,000 in a service members' TSP accounts before they can invest in a mutual fund.

"The higher expense ratios of the mutual funds can be off-putting, but if that's what you're trying to do, and as long as you do it the smart way, then I don't think those expenses are prohibitive," said JJ Montanaro, a certified financial planner who serves on USAA's Military Affairs Team. "The stated goal is that providing this option isn't going to increase the cost for the rest of the folks in the TSP."

Service members always have the option to invest in mutual funds elsewhere, as in an IRA or outside retirement account.

Other changes include a new TSP mobile app, the use of electronic signatures, receiving payments through direct deposit to your bank account or by check, and access to a virtual assistance through the website or on the mobile app.

Investors are reminded that the thousands of available mutual funds have not been vetted by the Federal Retirement Thrift Investment Board.

"If you are investing through the mutual fund window, you will set up separate accounts through TSP, and then you'll have those choices available," explained Gerri Walsh, president of the FINRA Investor Education Foundation.

"And to help you determine which choices are right for you, you might consider using the fund analyzer tool, available at www.finra.org.

For more information about the changes, visit www.tsp.gov/new-tsp-features.