RJG Financial and CPA Services has experience assisting federal employees with Thrift Savings Plan retirement planning.

Thrift Savings Plan

The Thrift Savings Plan (TSP) is a tax-deferred retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve. Established by Congress in the Federal Employees’ Retirement System Act of 1986, the TSP is similar to what is offered to employees of private sector corporations in form of 401(k) plans. 

Federal employees who participate in the TSP can put part of their federal salary in savings for retirement, receive matching contributions from their employing federal agency, and get a reduction in their current income taxes.

What is the Thrift Savings Plan?

As a defined contribution plan, the retirement income a participant receives from the TSP depends on how much they (and the employee’s agency, if eligible to receive agency contributions) put into their account during the years of federal service — plus the accumulated earnings over that time.

How Does the TSP Work with FERS and CSRS?

The Thrift Savings Plan and FERS

If a civilian employee is covered by the Federal Employees’ Retirement System (FERS), the TSP is one part of a three-part retirement package that also includes the FERS basic annuity and Social Security.

The Thrift Savings Plan and CSRS

If federal employee is covered by the Civil Service Retirement System (CSRS) or are a member of the uniformed services, the TSP is a supplement to their CSRS annuity or military retired pay.

How Does the Thrift Savings Plan Benefit Federal Employees?

Low Fees

TSP participants pay very low investment and administrative expenses.

According to TSP.gov, the fees in 2016 for each TSP fund are are listed below:

G FundF FundC FundS FundI FundL Funds
2016 Net Admin Expenses0.038%0.038%0.038%0.038%0.039%0.038%

According to the TSP.gov, net expenses are offset by the forfeitures of Agency Automatic (1%) contributions of FERS employees who leave Federal Service before they are vested, other forfeitures, and loan fees.

Income Tax Reduction through Traditional (pre-tax) or Roth (after-tax) Contributions

Traditional TSP contributions come out of the employee’s federal pay before taxes, and the investment earnings from the TSP account are tax-deferred.

Roth TSP contributions are deducted from the employee’s federal pay after taxes and the withdrawals in retirement are are tax-free.  Also, earnings from Roth contributions are paid tax-free as long as certain IRS rules are met.

Agency Automatic Contributions for FERS-covered employees

Federal employees in the FERS system automatically receive 1% of their basic pay from your agency each pay period. The TSP participant receives the agency contributions even if the employee does not contribute on their own to their TSP account.

Additional Agency Matching Contributions

FERS employees covered by FERS and also contribute 5% of their basic pay to the TSP each pay period, will get an additional 4% of your basic pay added to their TSP account from agency contributions.

After Age 50 Catch-Up Contributions

TSP participants that are age 50 or older can contribute an amount that exceeds (catch-up contributions) the annual TSP contribution limits.

Multiple Fund Investment Options

TSP participants have a choice of diversified investment funds and lifecycle funds.

Ability to Transfer Other Employee Plans Into TSP

For federal employees who already have tax-deferred money in a traditional IRA or another eligible employer plan, they can transfer those accounts into their TSP account. Participants may also transfer in Roth money from an eligible employer plan.

TSP Loans

Under certain circumstances, participants may be eligible to borrow from TSP account.

In-Service Withdrawals

Under certain circumstances, TSP participants may be eligible to access their TSP savings while they are still employed by the federal government.

Multiple Withdrawal Options

Participants have a variety of TSP withdrawal options when you leave federal service.


RJG Financial & CPA Services focuses on providing education and information to help you understand retirement income and CPA guided tax planning in your retirement options.