A Guide to Thrift Plans (Investment Saving Plans)

Let's suppose you want to achieve your financial goals in a stipulated period and based on your risk-taking ability, to name a few, child's education, retirement, saving tax or creating wealth, through mixing and matching various assets to create a diversified investment portfolio but don't have the time, interest, or skill to stay on top of your portfolio. Then, it would be best to consider investing your plan assets into one of the Thrift Plans' baskets of mutual funds offered for your needs and requirements. 


With Thrift Plans' You'll gain exposure to different financial products through professionally managed portfolios by choosing and investing from a range of expert-curated baskets of quality mutual funds to achieve your financial goals in a stipulated period and based on your risk-taking ability.


How are Thrift Plans Designed?


Whether you're new to the Thrift Plans, we're here to help with the basics. 

Here's how it works: you commit to making a monthly contribution into a savings account sponsored by your employer and get rewarded through a "matching". The investment happens through payroll deduction into "Portfolios" or baskets of funds customized to the company's objectives and the employee's circumstances. As an employee, you will control how your savings will be invested by choosing your risk profile, such as Low, Medium, or High risk.


As an investor, you are most likely seeking a balanced investment strategy as you are investing, you are seeking the right mix of risk and reward in your portfolio, and most probably, You want a good return on your investment, but also realize that there may be some risks associated with meeting your investment goals. Learn more and determine which investment strategy is right for you with our risk tolerance survey. 


Thrift Plans asset classes


Thrift Plans allow you to invest in 3 different portfolios based on the risk profile selected (High/Med and Low Risk). Although the underlying assets are registered funds that invest in one particular asset class, several funds will make up a portfolio to allow additional diversification and create a balanced portfolio of different asset classes. We can then change the allocation to the various asset classes based on the Risk profile. To develop a basic understanding of Thrift Plans' business cycle strategy, we look at broad economic trends rather than easily manipulated stock market patterns and invest in our portfolio funds.


● Money market funds, including cash, cash equivalent securities, and high-credit-rating, debt-based securities with a short-term maturity, intend to offer investors high liquidity with a very low level of risk. 


● Historically, bond index funds or Sukuk funds have proven to be a "slow and steady" type of investment compared to other securities such as stocks. However, they are considered fixed-income securities, meaning they can be used to generate a particular Long-term return objective and are an excellent tool for diversification.  


● Equity or Stock funds are securities based on company Shares investments. Generally, these investments have a more prominent ability to generate returns than fixed income such as bonds, Sukuk, or currency trading. However, this is accompanied by a higher risk; check out our article on the relationship between Risk and Return.   


The key to ensuring a balanced portfolio and the core element of our portfolio construction is to diversify your holdings into multiple asset classes like currencies, stocks, and bonds instead of holding just a single asset class. So at times, one or more funds will "zig" while others "zag", but we can reduce the risk associated with these fluctuations because of diversification. 


How to Maximize Your Thrift Plans?


A thrift plan is a Social Security solution, specifically for the Private sector, and a potent tool for retaining employees and increasing motivation. 

An employer-sponsored match plan allows employees to contribute a portion of their pre-tax earnings. In addition, there are several thrift plan incentives to encourage company loyalty and enable employees to take advantage of compound interest results over time on matching funds plans. Depending on the company’s option, the plan is customizable to meet the needs of the company and the employees in the form of Vesting schedules or sponsored support in Equity management through 3rd party. Our Academy services and tools are designed to help employees and employers get the most out of their thrift plans. Being aware of the funds' plan policy can help you make the most of your contributions and accounts. 

Learn more about the best ways to maximize the value of your thrift plans and your employer's matching contribution.


Why do you need to participate in the Thrift Plans program?


Participating in the Thrift Plans program can significantly increase your financial stability, including planning for buying a house, children's education, or retirement, but starting is essential. Contributing early gives the money in your account more time to increase value through the compounding of earnings. 


Our professionals can help you evaluate your Thrift Plans choices within the context of a holistic, tailored, goal-based saving plan. With thriftplan.io, you can pick, choose and invest from a range of expert-curated baskets of quality mutual funds to achieve your financial goals based on your risk tolerance and your time horizon for investing. Then, consider performance and deduct allocation from your salary. We work to build a financial investment plan based on your specific needs, wants, and goals.

Taking advantage of this opportunity is simple - investing and being ready for a greater future.