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Thrift Savings Plan (TSP): Everything You Need to Know

thrift savings plan

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees. The plan is also available for members of the uniformed services, including the Ready Reserve.

Congress established the Thrift Savings Plan in the Federal Employees’ Retirement System Act of 1986.  The TSP offers savings and tax benefits that private corporations may provide their employees under their 401-K plans.

Thrift Savings Plan (TSP)

The retirement income that you will receive from your TSP depends on how much you can put into your account during your working years and earnings over time. TSP is a supplement to your retired military pay.

Who Administers the Thrift Savings Plan?

The Federal Retirement Thrift Investment Board administers the TSP.

How Much Can You Contribute?

Withdrawing From Your Thrift Savings Plan

A partial withdrawal allows service members to make a one-time only withdrawal and leave the rest of the money in the TSP until a later date.

You can do so if:

Full Withdrawals

A full withdrawal is where you can take your money out at once, over a period of time, or purchase an annuity that will give you payments for the rest of your life. If you are a uniformed service member, you might also have tax-exempt contributions in your traditional balance if you had served in a combat zone. Those contributions, not the earnings from them, may be exempt from federal income taxes when distributed. There will be a tax on the earnings.

In-Service Withdrawals

In-service withdrawals are when you withdraw from your TSP account while you are still actively serving. There are two types, financial hardship and age-based.

TSP Loans

TSP loans will allow you to borrow money from your account while in the service.

You can get a general one for any purpose that you will need to pay back within 1-5 years.

You can also get a resident loan used for the purchase or construction of a home that will be your primary residence.

You will need to pay back between 1-15 years.

How To Set Up Your TSP Accounts

BRS Members of the Uniformed Services

For those who began serving on or after January 1st, 2018, your service automatically enrolled you.  You are enrolled once you serve for 60 days.

3% of your basic pay is deducted each pay period and deposited in the traditional balance of your TSP account.   You can elect to change or stop your contributions.

Non-BRS Members of the Uniformed Services

If you are not covered by the Blended Retirement System (BRS), your service establishes your account.

This occurs after you make a contribution election using your service’s automated system (for example, My Pay).

Returning Members

If you were previously in the BRS plan before you left the service, you would be automatically re-enrolled when you re-enter the military.

If you were not in the BRS plan, and you served fewer than 12 years when you left, your service may give you the opportunity to opt-in when you reenter.

If neither of these situations applies to you, you can still start a TSP account or resume as a non-BRS service member.

The Individual Funds

The Thrift Savings Plan has five individual investment funds –

There is a lot of information when it comes to having a Thrift Savings Plan. Contributing to yours over the years can help you immensely once you are retired from the military.

Make sure to take advantage of what the TSP can offer you for your financial future.


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