Family Budget Worksheet

The Basics Of The Thrift Savings Plan TSP

When it comes to retirement plans, those who work for the US government have options for putting additional money toward retirement similar to those available for those who work in the private sector.

Available both to civilians who work for the government (postal workers for example), and for those who work in the uniformed services (military), the Thrift Saving Plan TSP is basically a tax deferred federal retirement savings and investment plan, which works in a manner similar to 401K plans.

Participants choose how much they want to contribute to their TSPs, with the money acting as a supplement to the primary retirement plans offered by the federal government.

Administered by the Federal Retirement Thrift Investment Board (FRTIB), all federal employees have the option to enroll in the TSP program, as long as they are also eligible for one of the two retirement plans offered by the federal government: the Federal Employees Retirement System (FERS), and the Civil Service Retirement System (CSRS).

Thrift savings plans are considered defined contribution plans, because the retirement income generated depends on contributions made by the employee and his or her agency during the working years. Those participating in the FERS are allowed to contribute 11% of their base salary, while CSRS participants are allowed to contribute up to 6%.

And best of all? Contributions made to a Thrift Savings Plan TSP do not count toward an employee's FERS Basic Annuity or CSRS annuity contributions, although agency contributions vary depending on how much the employee contributes to their TSP.

TSPs are also easily managed on the DFAS mypay website or the employee express website, depending on if you are a civilian or military employee.

The advantages of using the mypay DFAS and employee express websites for managing TSPs are numerous, including secure login, instant access to your account information, and contact information for when you just need to talk to a real human being for advice.

And of course the 2009 TSP rates can be found on the National Finance Center website. More basic information on TSPs can be found on the OPM website - the official website of the US Office of Personnel Management - including information on catch up contributions and taxes.