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What is the Thrift Savings Plan (TSP)?

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the military. It is a defined contribution plan, similar to 401(k) style retirement savings plans in the private sector.

Because it is a defined contribution plan, this means that the retirement income you receive from your TSP account is dependent upon how much you (and your agency or service, if you’re eligible to receive your agency match) put into your TSP account during your working years and the earnings accumulated over that time.

Enrollment and Contributions

New federal employees are automatically enrolled in the TSP at a rate of 5% of basic pay to ensure they receive the full agency match. Your contributions are deducted from your paycheck each pay period. You can also stop, start or change contributions at any time.

Roth vs. Traditional Contributions

Traditional (pre-tax) contributions are deposited into the traditional balance of
your TSP account and are not taxed when you contribute them. You pay federal income taxes on these contributions and their earnings when you withdraw them.

Roth (after-tax) contributions are deposited into the Roth balance of your TSP account and are taxed when you contribute them. You pay no federal income taxes on these contributions when you withdraw them.

Roth earnings are tax-free when withdrawn as long as the following two conditions have been met:

  1. 5 years have passed since January 1 of the calendar year in which you made your first Roth contribution, and 
  2. you have reached age 59 1⁄2, have a permanent disability, or have died.

Eligibility

Most employees of the federal government are eligible to participate in the TSP. You are eligible if you’re any of the following:

  • A federal employee under the Federal Employees Retirement System (FERS) (generally if you were hired on or after January 1, 1984)
  • A federal employee under the Civil Service Retirement System (CSRS) (generally if you were hired before January 1, 1984 and did not convert to FERS)
  • A member of the uniformed services (active duty or Ready Reserve)
  • A civilian in certain other categories of government service

In addition to being covered by an eligible retirement system, you must also be:

  • actively employed by the federal government as a civilian employee or as a member of the uniformed services,
  • in a pay status in order to contribute, and
  • working full or part-time.

TSP Funds

There are five core TSP funds to offer broad market diversification.

G Fund

The G Fund is the Government Securities Investment Fund. The TSP states that the fund’s objective is to “ensure preservation of capital and generate returns above those of short-term U.S. Treasury securities.”

F Fund

The F Fund is the Fixed Income Index Investment Fund. The TSP states that the fund’s objective is to “Match the performance of the Bloomberg Barclays U.S. Aggregate Bond Index.”

C Fund

The C Fund is the Common Stock Index Investment Fund. This fund matches the performance of the Standard and Poor’s 500 (S&P 500) Index.

S Fund

The S Fund is the Small cap stock Index investment fund. This fund matches the performance of the Dow Jones U.S. Completion Total Stock Market Index.

I Fund

The I Fund is the International Stock Index Investment Fund. This fund matches the performance of the MSCI EAFE (Europe, Australasia, Far East) Index.

Lifecycle (L) Funds

The TSP also has lifecycle funds designed to let you invest your entire portfolio into a single fund that automatically adjusts its risk level depending on your target retirement date.

Fees

The TSP charges fees to cover its operational expenses. They are among some of the lowest in the industry.

TSP fees are paid by making small reductions to the TSP funds’ earnings. All TSP participants in a given fund pay the same percentage of their investment in the fund. This percentage is called an expense ratio. An expense ratio is the result of dividing a fund’s expenses by the average dollar amount held in the fund.

Current and Historical TSP Data

See current and historical daily share prices, monthly fund returns and annual fund returns here at TSPDataCenter.com.

Accessing Your TSP Account

Your TSP login is where you access your TSP account online to do things like check your account balance, view transaction history, download statements or make withdrawals. Login to your TSP account at the TSP.gov website.