The purpose of the TSP is to provide additional retirement income. The TSP offers federal civilian employees the same type of savings and tax benefits that many private companies offer under "401(k)" plans.
By participating in the TSP, Federal employees and uniformed service members can save part of their income for retirement, receive matching agency contributions, and reduce their current taxes.
Turn your $1 into $10. Did you know that every $1 you invest in the TSP can grow to $10 in 35 years—without you needing to do anything else? And yes, every $1 your agency or service contributes to your account can grow to $10 in 35 years too.
The TSP is a retirement savings and investment plan for federal employees. The purpose of the TSP is to provide retirement income through savings and tax deferred benefits that many private corporations offer their employees.
Many participants choose to keep their money in the TSP because of the TSP's low-cost funds. And you can always move money into your TSP account by making rollovers from eligible employer plans and from traditional IRAs. You always control how your money in the TSP is invested, even if you aren't making contributions.
Government Thrift Savings Plan for Beginners (TSP)
Can TSP make you a millionaire?
Be patient: Building wealth takes time and becoming a millionaire through the TSP will likely require a long-term perspective. Stay the course and continue saving and investing consistently, and you will increase your chances of reaching millionaire status.
Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.
One option available to you is an in-service withdrawal that you can make from your TSP account while you are still on active duty. (This option is also available to federally employed civilians.) There are two types of in-service withdrawals: financial hardship withdrawals and withdrawals at age 59 and a half.
You only get the full match if you contribute at least 5% of your basic pay each pay period. And yes, every $1 your agency/service contributes can grow to $10 in 35 years too. * (BRS participants who began service on or after January 1, 2018, begin receiving matching contributions after two years of service.)
With a direct rollover, you instruct the TSP to send your TSP assets directly to your new employer's plan or to an IRA—and you never have to handle the money yourself. With an indirect rollover, you start by requesting a lump-sum distribution from TSP and then take responsibility for completing the transfer.
Remember, you can keep money in your TSP account as long as you want to. If you have other sources of income in retirement, you may choose not to request withdrawals.
The G Fund is the safest of the TSP investment options. Instead of investing in a stock or bond index, it holds special U.S. Treasury securities issued only for TSP participants. These securities are backed by the U.S. government, so your principal is guaranteed and cannot lose value.
A $400,000 annuity purchased at age 70 can provide meaningful monthly income ranging from approximately $2,400 to $2,900, depending on your specific circumstances and the options you choose.
Your TSP account is a portable retirement benefit. This means that when you withdraw your account, you can have the TSP transfer part or all of your single pay- ment or certain monthly payments to a traditional IRA or an eligible employer plan (for example, the 401(k) plan of a new employer).
rule. It's fairly simple. The idea is that a retiree can with- draw 4 percent of their retirement account each year, year af- ter year, and not run out of money. For example, if your TSP is $400,000, then the 4 percent rule says you could withdraw $16,000 per year ($1,333 per month) for the rest of your life.
Do I still get the 5% match if I contribute all to the Roth TSP?
However, you'll receive additional matching contributions for depositing up to 5% of your paycheck to either TSP type. All matching contributions go to your traditional TSP, not your Roth – even if you contribute solely to your Roth account.
That's why we recommend splitting your investments evenly (25% each) between four types of stock mutual funds: growth and income, growth, aggressive growth, and international.
If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire. If you extrapolate this number, you can see that if you want to get $40,00 a year, you're shooting for a $1,000,000 balance.
Notably, those above $500,000 often have two decades or more of contributions. The largest TSP account balance as of March 2025 is $8.73 million—once even hitting a high of nearly $11 million at the end of 2021.
We highly recommend any federal employee who is of the age of 59.5+ or retired to strongly consider a savvy investment strategy we call: TSP Maximization. Which is simply: transferring some/all of their TSP balance & placing the funds into an IRA/Roth IRA in the private sector.
At what age does an annuity make sense? Buying an annuity generally makes the most sense when you are in your 60s or 70s, as you have recently retired or are a few years away from doing so. However, the type of annuity you're considering and your financial goals also factor into the decision.
A portfolio of stocks, bonds, mutual funds, exchange-traded funds (ETFs) and other assets offers more control than an annuity. Investors can adjust their allocations based on changing market conditions, risk tolerance and income needs.
