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The Thrift Savings Plan (TSP) is a
retirement
savings and investment plan for Federal employees. Congress
established the TSP in the Federal Employees' Retirement System Act of
1986. The purpose of the TSP is to provide retirement income. The
TSP offers Federal employees the same type of savings and tax
benefits that many private corporations offer their employees
under "401(k)" plans. TSP regulations are published in title 5 of the
Code of Federal Regulations, Parts 1600–1690, and are periodically
supplemented and amended in the Federal Register. The National Defense
Authorization Act extended participation in the TSP to members of the
uniformed services, including the Ready Reserve.
Read on for additional information.
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TSP Menu
The Thrift Savings Plan is an important benefit designed to help FERS, CSRS
and CSRS Offset federal employees save for their future. The TSP offers all
participants:
- Tax deferral on contributions
- A choice of 5 investment funds and additional life cycle funds.
- A loan program
- In-service withdrawals for financial hardship or after age 59½
- A choice of post-separation withdrawal options
- The ability to transfer money from other eligible retirement savings
plans into your TSP account
The TSP is especially important for FERS employees because it is one of three
parts of your retirement coverage. Employees can now contribute a significant
portion of their basic pay each pay period, up to the IRS annual limit. CSRS
employees do not receive Government contributions in their TSP accounts.
However, CSRS employees can still take advantage of the TSP to provide a source
of retirement income in addition to your CSRS retirement benefit.
The amount you can
contribute changes annually. You may elect to contribute any dollar amount
or percentage of basic pay. However, your annual dollar total cannot exceed the
Internal Revenue Code
limit, which is $16,500 for 2009 and $16,500 for 2010.
TSP has a link to a financial literacy website that you may want to link to:
http://www.tsp.gov/curinfo/OC09-11.pdf There is also
http://www.mymoney.gov/ that opm has
mentioned in other documents.
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