What You Need to Know About the Thrift Savings Plan
Know the details of this investment plan so you can leverage this benefit.
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and uniformed Service members. Details can be found at TSP but here are a few key features and benefits:
- All Service members are eligible to participate in the TSP.
- Service members can contribute up to 100% of base pay, special pay, and bonus pay up to a maximum annual contribution amount ($22,500 in 2023, and $66,000 in 2023 if in a tax-free combat zone). In addition, catch-up contributions of $6,500 are allowed for those aged 50 and older.
- Service member contributions and associated earnings are always theirs to keep.
- Service member contributions can be pre-tax (Traditional) or after-tax (Roth) but are pretax by default.
- Earnings and growth are tax-deferred.
- Multiple investment options are available from conservative to aggressive.
- Administrative and investment fees are very low compared to other retirement plans.
- Multiple withdrawal options are available at retirement (typically age 59½).
- Beneficiary receives balance at participant’s death.