About Your TSP
What is the Thrift Savings Plan (TSP)?
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. Established by Congress in the Federal Employees' Retirement System Act of 1986, it offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are eligible) have contributed to your account during your working years and the earnings on those contributions.
How Does the TSP Fit into My Retirement Package?
For employees covered by the Federal Employees Retirement System (FERS), the TSP is one part of a three-part retirement package that also includes your FERS basic annuity and Social Security. The government provides an automatic 1% contribution and matching contributions up to 4% of your basic pay.
For those under the Civil Service Retirement System (CSRS) or members of the uniformed services, the TSP is a supplement to your CSRS annuity or military retired pay. While there are no matching contributions for CSRS employees, the tax-advantaged growth remains a key pillar of long-term security.
Regardless of your retirement system, the TSP allows for both traditional (pre-tax) and Roth (after-tax) contributions. This flexibility ensures that you can tailor your savings strategy to fit your specific tax situation and retirement goals within the broader framework of your federal benefits.