Thrift Savings Plan: What It Is and How It Works for Federal Employees

When you work for the U.S. federal government, one of the most important tools for your future is the Thrift Savings Plan, a tax-advantaged retirement savings plan for federal employees and uniformed service members, similar to a 401(k) in the private sector. Also known as TSP, it lets you save and invest a portion of your salary before taxes are taken out, with matching contributions from your agency in many cases.

The Thrift Savings Plan isn’t just another account—it’s built to last. You can choose from five core funds: the G Fund (government securities), F Fund (fixed income), C Fund (U.S. stocks), S Fund (small and mid-cap stocks), and I Fund (international stocks). Plus, lifecycle funds (L Funds) automatically adjust your mix based on when you plan to retire. This flexibility makes it one of the most powerful tools for federal workers building long-term wealth. Unlike many private retirement plans, the TSP has extremely low fees—often less than 0.03% annually—which means more of your money stays invested instead of going to administrative costs.

Many federal employees don’t realize how much their agency contributes. If you’re under FERS, your agency matches up to 5% of your salary—$1 for $1 on the first 3%, then 50 cents on the dollar for the next 2%. That’s free money you’re leaving on the table if you don’t contribute at least 5%. And if you’re in the military, you can still contribute to the TSP while serving, and your savings grow tax-free until withdrawal. The TSP also lets you roll over money from other retirement accounts like IRAs or 401(k)s, making it a central hub for your entire retirement portfolio.

What you’ll find in this collection are real, practical guides written for people who need to understand the TSP without the jargon. You’ll see how to pick the right funds, how to avoid common mistakes like withdrawing too early, and how to use the TSP calculator to see exactly how much you’ll have at retirement. Whether you’re just starting your federal career or planning to retire in the next five years, these posts give you clear steps—not theory.