Who can participate in the Thrift Savings Plan (TSP)?
The Thrift Savings Plan (TSP) is a retirement savings plan for U.S. federal employees and military members. It offers low-cost investment options and government matching contributions, similar to a 401(k).
The TSP is a defined contribution plan specifically designed for federal employees and military personnel. It functions similarly to a 401(k), with employees contributing pre-tax or Roth (after-tax) dollars to their accounts, and the government matching a portion of these contributions. In 2024, employees can contribute up to $23,000 with catch-up contributions for those over 50.
The TSP is known for its low administrative costs, making it a cost-effective way to save for retirement. The investment options are more limited than in a typical 401(k), primarily offering broad index funds covering U.S. and international stocks, bonds, and government securities. TSP participants benefit from simplicity and lower fees, making it a highly efficient retirement savings vehicle.