Benefits of Thrift Savings Plan

  • Published
  • By Tech. Sgt. Karla V. Lehman
  • 94th Airlift Wing Public Affairs
DOBBINS AIR RESERVE BASE, Ga. --  The Thrift Savings Plan (TSP) provides military members a 401(k)-like savings plan, which allows members to contribute pre-tax dollars thereby reducing current taxes, and to accumulate long-term, tax-deferred savings and earnings, which can supplement future retirement income.

Participation is painless through payroll deduction, and account management is easy via worldwide web interface. The open seasons are eliminated and members can accomplish any action at any time.

The amount you can contribute changes annually. You may elect to contribute any dollar amount or percentage of basic pay. However, your annual dollar total cannot exceed the Internal Revenue Code limit, which is $18,000 for 2015 through 2016. For members who are age 50 or will become 50 this calendar year, may be eligible to make additional contributions to TSP, called “catch-up contributions” up to $6,000.
The Thrift Savings Plan is an important benefit designed to help members save for their future. The TSP offers all participants:

• Tax deferral on contributions
• A choice of five investment funds and additional life cycle funds.
• A loan program
• In-service withdrawals for financial hardship or after age 59 and a half
• A choice of post-separation withdrawal options
      o TSP Survivor Withdrawal Options
• The ability to transfer money from other eligible retirement savings
plans into your TSP account

According to dfas.mil, members may elect Roth or traditional TSP contributions. Traditional TSP contributions are deducted pre-tax; taxes are deferred until you withdraw your contributions. Roth TSP contributions are taken after-tax. If members elect to contribute to TSP, the contributions will be deducted from their pay account.

Contributing as much as you can to TSP retirement coverage is simply a smart financial move. Further information on TSP as well as election forms may be obtained at www.tsp.gov. You may also find information from your command or installation personal financial counselors, or your finance office.