Tsp Find Out All You Need To Know Now
TSP is short for Thrift Savings Plan and refers to 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
In the civilian component of the TSP, employees covered by the Federal Employees' Retirement System (FERS) and the Civil Service Retirement System (CSRS) can contribute to the TSP. The participation rules are different for FERS and CSRS employees.
The TSP is a defined contribution plan. The retirement income that you receive from your TSP account will depend on how much you (and your agency, if you are a FERS employee) have contributed to your account during your working years and the earnings on those contributions.
The contributions that you make to your TSP account are voluntary and are separate from your contributions to your FERS basic annuity or CSRS annuity. The money that you save and earn through your TSP account will provide an important source of retirement income.
Saving for your retirement through the TSP provides numerous advantages, including: before-tax contributions and tax-deferred investment earnings, automatic payroll deductions, low administrative and investment expenses, a diversified choice of investment options, including professionally designed lifecycle funds, agency contributions, if you are an employee covered by the Federal Employees Retirement System (FERS), under certain circumstances, access to your money while you are still employed by the Federal Government, a portable retirement account that can move with you when you retire or leave Federal service, and a variety of withdrawal options.
If you are covered by FERS, the TSP is one part of a three-part retirement package that also includes your FERS basic annuity and Social Security. If you are covered by the Civil Service Retirement System (CSRS) or are a member of the Uniformed Services, the TSP is a supplement to our CSRS annuity or military retired pay.
TSP benefits differ depending upon your retirement systems (FERS, CSRS, or Uniformed Services). Therefore, if you are not certain which retirement system you belong to, you should check with your personnel or benefits office.
Regardless of your retirement system, participating in the TSP can significantly increase your retirement income, but starting early is important. Contributing early gives the money in your account more time to increase in value through the compounding of earnings.
by: Devlin S.Walker
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