Thirft Savings Plan (TSP)
FESA will let you know the best option for maximizing your TSP while
paying the least in taxes.
Thrift Savings Plan (TSP)
Your Thrift Savings Plan (TSP) works like a 401(k) plan. You are able to contribute a percentage (or flat amount) of your pay (pre-tax) into your account. Then your agency makes an additional contribution on your behalf into your account (see table below) by matching the first 3% of your contributions dollar for dollar, and for the next 2%, 50 cents on the dollar.
In addition, there is an automatic contribution to your account of 1% of your pay, even if you choose not to contribute to the plan.
Note: There is a limit set each year by the government on how much you can contribute. In 2016, the limit was $18,000. You can choose to contribute more than this, but the balance will go into the Roth portion of your account, and it will not be a pre-tax deduction.
Agency Contributions to Your Account
(FERS Employees Only)
Your agency puts in:
|You put in:||Automatic 1%||Agency Matching||Total Contribution|
|More than 5%||1%||4%||Your contribution + 5%|
Note: CSRS employees do not receive matching contributions.
(If you are not certain which retirement system you are covered under (FERS or CSRS), you should check with your Supervisor, or personnel or benefits office.)
Enrolling in the TSP
If you are an employee hired or rehired after July 31, 2010, you will automatically be enrolled in the TSP with a default deduction of 3%. You can increase, decrease or stop this amount at any time.
Rollovers from another Institution or Employer
Your TSP will accept into the traditional balance of your TSP account of both transfers and rollovers of tax-deferred money from traditional individual retirement accounts (IRAs), SIMPLE IRAs, and eligible employer plans.
You are eligible to take a loan from your TSP if you have at least $1,000 of your own contributions and the earnings associated with those contributions in their TSP account to be eligible to apply for a loan. There are two types of loans available to you:
Residential Loans: Residential loans are only for the purchase of a primary residence.
General Purpose Loans: General purpose loans can be used for any purpose.
Your TSP provides two different types of in-service withdrawals: financial hardship and age-based.
Financial Hardship: This option allows you (regardless of age) if you demonstrate financial hardship an opportunity to withdraw your own contributions and the earnings on those contributions, up to the amount of the documented hardship.
Age-based: This option allows you—if you are 59 ½ or older– a one-time opportunity to withdraw all or a portion of the vested account balances. You are allowed to withdraw it directly, or alternatively, perform a rollover to another qualified plan. If you do not roll your funds over, you will incur taxes upon withdrawal.