.png)
The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and members of the uniformed services, including the Army, Navy, Air Force, Marine Corps, Coast Guard, Space Force, Public Health Service, and the National Oceanic and Atmospheric Administration (NOAA).
Tax-Deferred Contributions
Contributions to a Traditional TSP are made on a pre-tax basis, reducing taxable income in the year of contribution. Earnings within the Traditional TSP grow tax-deferred, and participants pay taxes on withdrawals in retirement.
Portable Retirement Savings
Participants can maintain their TSP accounts even if they change federal employers or leave federal service, providing continuity in retirement savings.
Tax-Free Qualified Withdrawals
Contributions to the Roth TSP are made on an after-tax basis, and qualified withdrawals in retirement are entirely tax-free.
Variety of Investment Options
TSP offers a range of investment options, including individual funds and L Funds (lifecycle funds that automatically adjust the asset mix based on the participant's target retirement date), allowing participants to tailor their investment strategy.
Book a Free online consultation
with one of our seasoned Financial Tax Planners today!
Ready to optimize your financial strategy and make the most of your resources?
Our experts are ready to understand your unique needs, answer your questions, and provide personalized insights to help you navigate the complexities of tax planning.
hey
(TSP) retirement savings plan
Designed for federal employees and members of the uniformed services
Traditional TSP (TSP Traditional)
-
Contributions: Contributions are made on a pre-tax basis, reducing taxable income in the year of contribution.
-
Tax Treatment: Earnings within the Traditional TSP grow tax-deferred, and participants pay taxes on withdrawals in retirement.
-
No Roth Option: Traditional TSP does not have a Roth contribution option.
-
Required Minimum Distributions (RMDs): Participants are required to take RMDs starting at age 72, or if they are still working at age 72, they can delay RMDs until they retire.
​
Roth TSP (TSP Roth)
-
Contributions: Contributions are made on an after-tax basis, meaning they do not reduce taxable income in the year of contribution.
-
Tax Treatment: Earnings within the Roth TSP grow tax-free, and qualified withdrawals in retirement are also tax-free.
-
No RMDs During Lifetime: Roth TSP accounts are not subject to RMDs during the participant's lifetime, making it an attractive option for those who want to leave assets to heirs.
-
Income Limits: There are no income limits for Roth TSP contributions.
TSP Lifecycle (L) Funds
-
Professional Management: L Funds are lifecycle funds that automatically adjust the asset mix based on the participant's target retirement date. They are professionally managed and provide a diversified investment strategy.
-
Risk Tolerance: L Funds are designed to match the participant's risk tolerance over time, becoming more conservative as the target retirement date approaches.
-
Simplicity: L Funds offer a simple investment solution for participants who want a hands-off approach to managing their TSP accounts.
​
Understanding the specific rules and features of each TSP option is crucial for participants to make informed decisions. Book Free Online Consultation for personalized guidance based on individual circumstances and retirement goals.