FedBenRetire210-660-4040Book a free reviewThe Thrift Savings Plan
A supplement to FERS, not a guarantee. How the match works, who is eligible, and the line on your statement worth a second look.
What the TSP is and how it works
The TSP was created as a supplement to the FERS system. As a defined contribution plan, it lets federal employees contribute a percentage of salary up to a capped amount, and the government matches that contribution up to 5 percent of annual salary.
It is structured to work like a 401(k). Anything in the account, whether you put it there or the government match did, is taxable only as you draw money out. The exception is the Roth TSP, where contributions, growth and interest are tax free.
How your TSP balance grows
The TSP is not a guaranteed payment in retirement. Your contributions and the match grow with the market, depending on the investments you choose.
The lifetime income figure on your statement
Any lifetime income advertised on a TSP statement is in fact an annuity purchased through MetLife. It can require the full surrender of your account to MetLife in return for a lifetime payment, with no residual going to your beneficiaries.
That is not a reason to rule it out. It is a reason to understand exactly what you are giving up before you sign. Anyone considering TSP withdrawal options should talk it through with a qualified financial professional first.
Who is eligible for the TSP
CSRS participants are also eligible to make TSP contributions, under the same guidelines as FERS participants.
The FERS annuity pays less to retirees than the CSRS annuity does. FERS participants make up ground elsewhere: they receive Social Security payments in retirement, and government matching contributions while they are working.
CSRS participants do not qualify for government matching. They may still contribute, and everything they put in grows according to the investments they choose. This replaced the old practice of buying government savings bonds by allotment from a paycheck.
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See what your TSP is actually on track to do.
A counselor reviews your allocation, your contribution rate and your withdrawal order alongside the rest of your retirement picture.
TSP questions we get asked most
What is the Thrift Savings Plan?
The TSP is a defined contribution plan created as a supplement to FERS. You contribute a percentage of salary up to a capped amount, and it is structured to work like a 401(k).
How much does the government match?
For FERS employees the government matches up to 5 percent of annual salary. CSRS employees receive no match.
Can CSRS employees contribute to the TSP?
Yes, under the same guidelines as FERS participants. There is no government match, but everything they put in grows according to the investments they choose. This replaced the old practice of buying government savings bonds by allotment from a paycheck.
What is the difference between the traditional TSP and the Roth TSP?
In the traditional TSP, everything in the account, whether you contributed it or the match did, is taxable as you draw it out. In the Roth TSP, contributions, growth and interest are tax free.
How do I know what my TSP is invested in?
Pull up your account and look. If you have never changed it, you are in whatever fund you were defaulted into on your first day. A counselor will open it with you and explain what that fund actually does.
Is the TSP guaranteed?
No. The TSP is a supplement, not a guaranteed payment in retirement. Your contributions and the match grow with the market depending on the investments you choose.
What is the lifetime income figure on my TSP statement?
Any lifetime income advertised on a TSP statement is an annuity purchased through MetLife. It can require the full surrender of your account to MetLife in return for a lifetime payment, with no residual going to your beneficiaries. That is not a reason to rule it out. It is a reason to understand exactly what you are giving up before you sign, and to talk it through with a qualified financial professional first.
Still have a question? A counselor will answer it against your own record. Request a free review or call 210-660-4040.