What is the government Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a tax-deferred retirement savings and investment plan that offers Federal employees the same type of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
Who is eligible for TSP?
Who Is Eligible for the Thrift Savings Plan? In order to be eligible to contribute to the TSP, you must be employed by the federal government or be a member of the military. Most federal government employees have access to the TSP, but if you’re not sure, check with your benefits office.
What is the difference between a Thrift Savings Plan and a 401k?
Not exactly, though they are structured similarly and have the same contribution limits. A TSP is what the federal government offers instead of a 401(k), which is the type of plan offered by private employers. Thus, you cannot have both a TSP and a 401(k).
Can I withdraw money from my TSP before I retire?
The answer is yes, you can, and one option is called an early distribution — but it comes at a cost. Take a look at these details: Withdrawals can be made while employed with the uniformed services/federal government. An early distribution is a permanent reduction of retirement savings.
How much does TSP match for civilians?
The first 3% of pay that you contribute will be matched dollar-for-dollar; the next 2% will be matched at 50 cents on the dollar. Contributions above 5% of your pay will not be matched. If you stop making regular employee contributions, your matching contributions will also stop.
How much money is in my TSP?
Log into My Account to find your current account balance, or call the ThriftLine at 1-877-968-3778.
When can I withdraw my TSP money?
The Internal Revenue Code (IRC) requires that you receive a portion of your TSP account beginning in the calendar year when you become age 72* and are separated from service. The portion is called a Required Minimum Distribution (RMD).
Is TSP a 401k or IRA?
The TSP is a tax deferred “employer” retirement plan for federal employee comparable to a 401k plan in the private sector. An IRA is a tax deferred “individual” retirement plan.
What is the average TSP balance by age?
What is the average TSP balance at retirement?
|Age||Average contribution rate||Average balance|
|All ages||9%||$ 95,600|
What is the Thrift Savings Plan and how does it work?
Your contributions to a thrift savings plan are made with pre-tax dollars . The government will withhold this money before generating your paycheck and W-2, meaning that it will reduce your taxable income by the amount of your contribution.
How to invest in the Thrift Savings Plan?
How to invest. We offer a variety of investment options for your retirement. You can choose your own mix of investments from a short-term U.S. Treasury security to index funds made of domestic and international stocks. Or, if you prefer, choose one of our Lifecycle (L) Funds that uses a professionally determined investment mix designed to
Which TSP L Fund is the best?
Vanguard Total Stock Market Fund
What are thrift savings plans?
The Government Securities Investment (G) Fund