Complete Guide
TSP for Federal Employees
Everything you need to know about the Thrift Savings Plan — the government's retirement savings program with low fees and generous matching.
5%
max govt match
$23K
2024 contribution limit
0.05%
expense ratio
73
RMD start age
Key Topics
TSP Basics
Understanding your federal retirement savings account.
- TSP is a defined contribution plan (like a 401k)
- 1% automatic agency contribution (free money)
- Agency matches up to 4% more of your contributions
- Maximum government contribution: 5% of salary
- Traditional (pre-tax) and Roth (after-tax) options
TSP Match Structure
How the government matches your contributions.
- 1% automatic: You get this even if you contribute $0
- First 3%: Dollar-for-dollar match (contribute 3%, get 3%)
- Next 2%: 50 cents per dollar (contribute 2%, get 1%)
- Contribute 5% to get full 5% match
- Vesting: 3 years for matching, automatic is immediate
TSP Funds
Investment options available in the TSP.
- G Fund: Government securities (safest, lowest return)
- F Fund: Bond index (fixed income)
- C Fund: S&P 500 index (large cap stocks)
- S Fund: Small/mid cap stocks
- I Fund: International stocks
- L Funds: Lifecycle funds (auto-adjust over time)
Withdrawal Options
How to access your TSP in retirement.
- Monthly payments: Set amount or life expectancy based
- Single withdrawal: Partial lump sum any time
- Full withdrawal: Take entire balance
- Annuity: Convert to guaranteed income (rarely used)
- Mix: Combine strategies as needed
Roth vs Traditional
Choosing between pre-tax and after-tax contributions.
- Traditional: Tax-deductible now, taxed in retirement
- Roth: After-tax now, tax-free in retirement
- Roth better if you expect higher taxes in retirement
- Traditional better if you expect lower taxes later
- Diversifying both gives flexibility
RMDs
Required Minimum Distributions starting at age 73.
- Start at age 73 (was 72, changed in 2023)
- Traditional TSP only (Roth TSP not subject to RMDs)
- Penalty: 25% of amount not withdrawn
- First RMD can be delayed to April 1 of following year
- Calculate using IRS life expectancy tables
The 4% Rule
A common guideline for sustainable retirement withdrawals. Withdraw 4% of your TSP balance in year one, then adjust for inflation each year. This strategy historically provides income for 30+ years without depleting your savings.
$500K
= $1,667/mo
$750K
= $2,500/mo
$1M
= $3,333/mo
TSP Tools
Related Topics
Key Terms
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