Thrift Savings Plan (TSP)
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees, retirees, and members of the uniformed services. The TSP offers the same types of savings and tax benefits that private companies offer their employees under the 401(k) plans. The TSP is a defined contribution plan, which means that the retirement income that an individual receives from his or her TSP account depends on how much is contributed by the individual and the federal agency (if the individual is eligible to receive agency contributions) to the individual’s account during his or her working years as well as the earnings that accumulate over that time.
If a federal employee is covered under the Federal Employees Retirement System (FERS), the TSP is one of three components; the other two components are the FERS basic annuity and Social Security. If a federal employee is covered under the Civil Service Retirement System (CSRS) or happens to be a member of the uniformed services, the TSP is a supplement to the individual’s CSRS annuity or military pay.