Thrift Savings Plan (Retirement)
Thrift Savings Plan (Retirement)
The Thrift Savings Plan (TSP) is a contribution-based retirement plan for service members and civilian Government employees. The TSP offers savings and tax benefits similar to those of a civilian 401(k) plan. Your contributions, compounded with interest, become your retirement income.
The TSP Web Site
The Thrift Savings Plan Web site offers the following:
- Participant statements
- Account access
- Financial calculators
- TSP newsletters
- Detailed online planning guide
- Forms and publications
Plan highlights and features
How to Enroll
The TSP differs from the Military Retirement System in that participation in the TSP is optional and not automatic. To participate in the TSP, members must sign up with their branch of the service. Members contribute from their own pay on a pre-tax basis. The amount they contribute and the earnings attributable to their contributions belong to them, even if they don’t serve the 20 years necessary to receive military retirement pay.
Plan Contributions
TSP participants can contribute up to 8 percent of basic pay during each pay period to their TSP account as soon as they become a member of the uniformed services. Contributions can be as little as 1 percent of basic pay each pay period. Guard members who contribute from their basic pay may also contribute up to 100 percent of any incentive pay or special pay (including bonuses) received (up to the limits established by the Internal Revenue Code). The retirement income you receive from your TSP account depends on the amount contributed during your working years ( some services may match your contributions) and the interest earned on contributions.
A TSP contribution of only $40 each month, assuming 7 percent interest each year, will look like this in 20 years:
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