Thrift Savings Plan Information

TSP

What is the Thrift Savings Plan?

In 1986, Congress established the TSP in the Federal Employees Retirement Act. The TSP is made up of the same model the 401k uses. They’re both defined as “contribution plans,” and both are employee-dependant–meaning you have to fund it yourself. Even the contribution limits are the same.

The TSP, like the 401k, is tax-deferred.

This means you make contributions to the account using pre-tax dollars, paying taxes on your savings when you withdraw funds from the TSP at retirement.

There is also a Roth TSP option, where you contribute using your post-tax dollars. This way, you won’t incur taxes or penalties on your investments when you withdraw.