The Federal Benefit That Quietly Beats the TSP (Yet Almost No One Uses It)

Every federal employee knows about the TSP.

But what if I told you that there’s another benefit — one that’s quietly offered, often ignored, and in certain cases, can actually beat your TSP’s performance?

And here’s the kicker: almost no one uses it.

The Forgotten Wealth Builder

It’s called the Voluntary Contribution Program (VCP) — a tool that, for decades, was right under the noses of CSRS employees (and some with CSRS service).

Here’s how it works:

• You contribute after-tax dollars, separate from your TSP.

• Those contributions earn a guaranteed interest rate — historically higher than the G Fund, and immune to market ups and downs.

• When you retire, you can convert the contributions into a Roth IRA — creating a pool of tax-free income for life.

Sound powerful? It is.

Why It Quietly Beats the TSP (Sometimes)

➡ Guaranteed growth. While the TSP G Fund gives you government-backed safety, VCP interest rates have at times outpaced it — with zero risk of loss.

➡ Roth conversion opportunity. The TSP doesn’t let you simply roll into a Roth. With the VCP, you can build a Roth IRA without income limits, penalties, or complicated workarounds.

➡ Estate planning edge. A Roth IRA from VCP funds keeps growing tax-free — and unlike the TSP, it can be passed on to heirs without the same tax drag.

➡ No interference with your pension or TSP. It’s a true extra layer.

The Reason You’ve (Probably) Never Heard of It

👉 HR rarely mentions it. It’s not part of standard retirement briefings.

👉 It requires initiative. There’s paperwork involved — and no one will chase you to do it.

👉 Most people don’t ask until it’s too late. Once you retire, the door closes.

“But I’m FERS — does this help me?”

If you’re under FERS, you don’t have access to VCP, unfortunately.

But the mindset here is what matters.

Are you overlooking low-risk, high-value opportunities — like buying back military time for a guaranteed pension boost?

Are you thinking about where your next retirement dollar does the most good (TSP, Roth, after-tax)?

Your TSP is a fantastic tool. But it’s not the only one.

And sometimes, the quietest federal benefit is the one that gives you the biggest edge.

1) If you have CSRS service: Ask your HR rep about the Voluntary Contribution Program — before you retire.

2) If you’re FERS, think: where am I missing low-risk, high-return moves?

Best,
—FWR