Thrift Savings Plan (TSP)

Comparable to the best private-sector 401(k)-type plans, you can save up to 11% of your salary before taxes towards your retirement. This program features:

  • An IRS match up to 4%
  • No income tax is payable until retirement
  • The opportunity to invest your money in various investment funds

The best way to ensure that your retirement income meets your needs is to start investing in the Thrift Savings Plan (TSP) at the beginning of your federal service, and to continue to do so throughout your career. 

The TSP is a retirement savings and investment plan for federal employees. The purpose of the TSP is to provide retirement income through savings and tax deferred benefits that many private corporations offer their employees. The TSP is similar to private sector 401(k) plans.

In the Federal Employee Retirement System (FERS), the TSP is one part of the three-parts of your retirement package, along with your FERS Basic Annuity and Social Security.

For FERS employees that do not participate in TSP, the Service will still contribute an amount equal to 1 percent of your base pay to your account. If you are contributing your own money, the Service will match your contribution dollar for dollar for the first 3 percent and fifty cents for each dollar for the next 2 percent. For employees contributing 5% of their base pay, the total contribution will equal 10 percent.

You can start, change, stop, and resume TSP contributions at any time. There is no waiting period.  You can contribute up to the maximum amount permitted by the Internal Revenue Service regulations, $16,500 beginning in 2009. Contributing to the TSP also reduces your taxable income. The more you contribute the less tax you pay up front.

There are five investment funds:

  • G Fund (Government Security Investment Fund)
  • F Fund (Fixed Income Investment Fund)
  • C Fund (Common Stock Index Fund)
  • S Fund (Small Capitalization Stock Index Investment Fund)
  • I Fund (International Stock Index Investment Fund)

The L Fund (Lifecycle Funds) invests in a mix of the five funds above offered by the TSP based on the date you will need your monies. The mixture of each of the five life cycle funds will have varying percentages of the above funds balancing risk, return and security factors.

For more information on the Thrift Savings Plan visit the TSP website at

A good reference booklet of the TSP program is the Summary of the Thrift Savings Plan, which you can download at (670KB PDF*)

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