A Penny Saved . . .
Federal workers have seven working days to make what could be two of the key decisions of their careers: whether to join the thrift savings plan and where to invest the money. Joining the plan is a no-brainer. Just do it. Deciding where to invest takes more thought.</br></br>For many young workers, the right long-term investment could mean a million extra dollars to spend in retirement. Experts say that savings plan accounts will produce half of the retirement income of workers covered by the Federal Employees Retirement System.</br></br>Employees who miss the Jan. 31 deadline to join the plan will have to wait until the end of the year for the next open season. That's a lot of investing time (and potential earnings) to lose. They can, however, move existing funds from one account to another every month.</br></br>Feds don't need a session with Alan Greenspan to understand the thrift savings plan, but it can be confusing. Marjorie Mitchell, a Defense Department worker, would like a simple explanation of the funds. Here it is, along with each fund's track record since 1988: + Treasury fund. The G-fund has no risk, in the sense that it is guaranteed by the government. It is invested in Treasury securities with a guaranteed monthly rate. The problem is that the G-fund (or any investment, for that matter) may not generate enough income to allow the investor to keep well ahead of inflation. In 1988 and 1989, the G-fund returned 8.8 percent; 1990, 8.9 percent; 1991, 8.15 percent; 1992, 7.23 percent; 1993, 6.14 percent; 1994, 7.2 percent; 1995, 7.03 percent; and last year, 6.66 percent.</br></br>+ Bond fund. The F-fund tracks the Lehman Brothers Aggregate Bond Index. As with stocks, bonds go up and down. In 1988, the F-fund returned 3.6 percent; 1989, 13.8 percent; 1990, 8 percent; 1991, 15.7 percent; 1992, 7.2 percent; and 1993, 9.5 percent. In 1994, the fund lost 2.96 percent; in 1995, it returned 18.31 percent; and last year, it returned 3.66 percent.