As a member of the uniformed services you receive many great benefits.
Even if you are not covered by the
Blended Retirement System
you can still contribute to the Thrift Savings Plan.
This can have a significant impact on
your life in retirement.
By contributing to the TSP you can help protect your
future while you protect our country.
Like a 401k the retirement income you receive from your TSP account will
depend on how much money you contribute to it
during your working years and the
earnings that accumulate over time.
And your TSP retirement benefits are yours
no matter how long you serve.
So why is participating in the TSP a great idea?
Here are three reasons.
Low administrative fees.
Some plan fees can
take the bang out of your buck but the TSP as expenses are lower than similar
plans so you keep more of what you save.
Investment options.
The TSP offers you
five individual investment funds that cover nearly all the investment landscape.
The TSP also has Lifecycle funds which are an ideal solution if you
don't have the time, experience or interest in managing your retirement investments.
Tax treatments
The TSP gives you a choice of tax treatments.
Pre-tax or traditional and after tax or Roth.
Traditional contributions come out of
your pay before tax and your investment earnings are tax deferred.
When you withdraw your money at retirement it's subject to income tax.
With Roth contributions you pay taxes on the money you save before it goes into your TSP
account so you pay no income taxes when you take it out and your earnings can
also be tax-free if certain
conditions are met.
Watch our Roth video to find out more.
If you are serving in a combat zone here's
something else you need to know.
When you make traditional contributions from
tax-exempt pay you won't pay any tax on the contributions but your earnings will
be taxed when withdrawn.
And if you make Roth contributions from your tax-exempt pay
not only are your contributions tax-free when withdrawn but so are their
earnings as long as you meet the necessary IRS rules.
Here's how you sign up.
Check with your services payroll office about its procedures for starting
your TSP contributions.
You'll either use your
services electronic system or you'll fill out a form TSP-U-1, Election Form.
If you complete form U-1 remember that you must return it to your
payroll office not the TSP.
Want to know more?
Visit our website at tsp.gov or
call the thrift line and speak to a participant services representative.
For more information about
contributing to the TSP
contact your services payroll office.
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