Thrift Savings Plan (TSP)

Overview of the TSP and Associated Funds
Mature woman with calculator and bill in right hand

Overview of the TSP

  • The TSP is a retirement savings and investing plan for federal employees and members of the uniformed services.
  • It is a defined contribution plan administered by the Federal Retirement Thrift Investment Board
  • It closely resembles the 401(k) plan and is widely recognized as one of the finest retirement plans of its kind.

Show More

  • The retirement assets derived from a TSP account will depend on how much has been contributed (both by the employee and agency) during the account holder’s working years and the earnings on those contributions.
    • The government will make automatic and matching contributions for certain employees under the Federal Employee Retirement System (FERS) based upon the employee’s contributions.
      • Typical FERS matching formula: 1% regardless of employee contribution (even if zero), then 1% for each 1% contributed by the employee (up to a maximum of 3%), then 0.5% for each 1% contributed by the employee (up to an additional 1% match maximum). In other words, the employee may receive up to 1% + 3% + 1% = 5% in agency matching contributions.
    • All new and rehired employees are automatically enrolled to contribute 5% of their salary (can opt out).
  • The TSP is not designed for short-term investments (e.g., emergency fund, near-term savings goals) or speculative investments (e.g., market timing, technical trading).


Individual TSP Funds
  • G Fund (Government Securities Fund): A nonmarketable short-term US Treasury security not available to the public.
    • Backed by the full faith and credit of the US Government.
    • Equivalent to a high-yield stable value fund.
    • No possibility of a loss of principal and no risk of loss.
    • Loss of purchasing power to taxes and inflation.
  • F Fund (Fixed Income Index Fund): A fund invested in a diversified group of high-quality U.S. government, corporate, and mortgage-backed bonds.
    • Loss of purchasing power to taxes and inflation.
    • Can and does fluctuate in value.
  • C Fund (Common Stock Index Fund): A fund invested in large and medium-sized U.S. companies.
    • Represents ~ 82% of the US stock market.
  • S Fund (Small Stock Index Fund): A fund invested in small to medium-sized U.S. companies.
    • Represents the rest (~ 18%) of the US stock market.
    • The C and S Funds combined (in roughly a 4:1 ratio) cover/replicate almost the entire U.S. stock market.
  • I Fund (International Stock Index Fund): A fund invested in large companies in 21 developed countries in Europe, Australia, and the Far East.
    • Note: The I Fund does not have any emerging market or small-cap holdings.
    TSP Lifecycle (L) Funds
    • Lifecycle (L) Funds: Each of the L funds is a target date retirement fund that maintains a mix of the five core funds that adjusts over time in anticipation of the employee’s expected retirement date. The funds employ an active investing approach; they set glide paths and shift to become less volatile as the target years approach.
      • L Income, L 2025, L 2030, L 2035, L 2040, L 2045, L 2050, L 2055, L 2060, and L 2065
    • Like with any retirement date fund, you should pick a fund by desired asset allocation, rather than the date.

      Tracking Most Similar Funds

      • G Fund: There is no ticker symbol for the G Fund. The interest paid by this fund is equal to the average rate of return on outstanding Treasury securities with four or more years to maturity.
      • F Fund: For tracking purposes, use either the Vanguard Total Bond Market Index Fund (ticker symbol: VBMFX) or the iShares Lehman Bond Index (ticker symbol: AGG).
      • C Fund: For tracking purposes, use the S&P 500 Large Cap Index (ticker symbol: $SPX).
      • S Fund: For tracking purposes, use the Dow Jones U.S. Completion Total Stock Market Index (ticker symbol: $DWCPF).
      • I Fund: For tracking purposes, use the iShares MSCI EAFE Index Fund (ticker symbol: EFA).
      Computer screen showing stocks and broker in the background analyzing the data
      Wooden block with alphabet building the word LIMIT

      Annual Contribution Limits

      • The IRS annual contribution limit for 2024 is $23,000.
        • This applies to the combined total of traditional and Roth TSP contributions.
        • For members of the uniformed services, it includes all traditional and Roth TSP contributions from taxable basic pay, incentive pay, special pay, and bonus pay; but it does not apply to traditional TSP contributions made from tax-exempt pay earned while in a combat zone.
        • This does not include any agency matching contributions.
          • Note: Regardless of whether you choose to make traditional or Roth TSP contributions, or some combination of the two/both, agency matching contributions are always traditional.
        • The $23,000 limit for 2024 does not include any outside (the TSP contributions) to a traditional or Roth IRA.

      Show More

      • The IRS annual “catch-up” contribution limit (for those 50+ years of age) for 2022 is $7,500.
      • The amount you contribute now to your TSP can make a big difference over time.
      • The more you contribute to your TSP, the greater your principal amount will be. With a greater principal amount, the more you could end up with in interest and appreciation. Compounding interest will allow your investment to grow at a faster rate.
      • The biggest factor with compounding interest is time.

      Agency Match

      • Federal employees receive a match on up to 5% of their base pay. That’s free money. Do not leave it on the table!
      • Agency matching contributions are made each paycheck. Therefore, to gain the maximum match, you must contribute at least 5% throughout the entire year. Once the employee reaches the annual IRS contribution limit for the calendar year, the employee’s contributions will automatically stop and the agency matching contributions will stop, too.
      • To gain the maximum match, you must ensure that: (1) you contribute at least 5% of your salary for each pay period throughout the year; and (2) you don’t reach the annual IRS contribution limit before the last paycheck.
      • For employees who want to meet the IRS annual contribution limit for the year, you need to be careful that you don’t hit the limit too early (and forgo agency matches) or too late (and fall short of the maximum contribution limit). Some people like to front-load contributions earlier in the year; if you do this, ensure you don’t front-load so aggressively that you hit the IRS limit before the end of the year, which could cause you to miss out on the maximum agency match, and don’t front-load your contributions to the point where you don’t have enough to keep contributing 5% of your salary in each pay period. In a typical year, there are 26 pay periods, but depending on the calendar year, some years have had a different number.
      Piggy back with calculator, icons of money and percentage around it
      Woman looking over charts on laptop

      TSP Contribution Charts

      • For 2024, if you want equal payments deducted over the calendar year for 26 pay periods, you should contribute $885 each pay period to reach the IRS contribution limit of $23,000.
      • For 2024, if you are eligible to make catch-up contributions (the year in which you turn 50 years of age and after), you would elect to contribute (an additional) $289 per pay period to reach the IRS contribution limit of $7,500.

      Traditional vs. Roth TSP Contributions

      • “Traditional” is not an account type; rather, it refers to the way the money is treated for tax purposes.
        • Contributions are not taxed today (i.e., pre-tax); rather, they (and any growth) are taxed when the money is withdrawn from the account in the future.
      • “Roth” is not an account type; rather, it refers to the way the money is treated for tax purposes.
        • Contributions are taxed today (i.e., after-tax); they (and any growth) are not taxed when the money is withdrawn from the account in the future.
        • Roth TSP is similar to a Roth 401(k), not a Roth IRA.
          • You are not required to take minimum distributions from a Roth IRA. You are required to begin taking minimum distributions from the Roth TSP by April 1st following the year you turn age 72 if you are no longer employed by the federal government.
          • Unlike contributions to a Roth IRA, there are no income restrictions on contributions to the Roth TSP.

      Show More

      Drinking glass full of coins with a green branch on top
      • As a general rule of thumb, if your tax rate is going to be higher in the future when you withdraw the money than it is now, Roth contributions make sense (and vice versa).
      • While most people should probably use a tax-deferred option instead of a Roth option during their peak earnings years, that is not the case for most TSP-eligible folks. Those in the uniformed services are probably in a very low tax bracket now (thanks to low pay, probably no state taxes, and a large percentage of their income from non-taxable allowances and tax-exempt war zone pay), so they should generally use the Roth option. In addition, many uniformed service members and federal workers will have a pension in retirement and the more taxable income you will have in retirement filling the brackets, the better Roth retirement account contributions become.
      • You may make/mix both traditional and Roth TSP contributions.
        • Any matching contributions will always be treated as traditional for tax purposes.
      • In retirement, you can minimize your effective tax rate by withdrawing some of your income from tax-deferred accounts (e.g., traditional 401(k)), some from taxable accounts (at preferential long-term capital gains rates), and some from tax-free (primarily Roth) accounts. No one knows exactly what percentage of their portfolio a retiree will ideally have in Roth accounts upon retirement, but most experts agree that you ideally want some of both.
      Dollar bills and small bag with dollar sign on it hanging out to dry

      Interfund Transfers and Contribution Allocations

      • Interfund Transfer (IFT): An IFT allows a TSP participant to redistribute/move all or part of the existing money in their TSP account among the different TSP funds. For each calendar month, the participant’s first two IFTs can redistribute money in their account among any or all of the TSP funds. After that, for the remainder of the month, IFTs can only move money into the G Fund.
        • When you make an IFT, you choose the new percentage you want invested in each fund. You cannot move specific dollar amounts among the funds
        • You cannot move specific types of money among the funds. For example, if you have traditional and Roth balances in your account, your interfund transfer will move a proportional amount from each type of money into the funds that you have specified.
        • Does not change the way new contributions, transfers, or rollovers into the TSP, or loan payments are invested.
      • Contribution Allocation (CA): The CA allows a TSP participant to choose how new contributions, rollovers, and loan payments going into their account are invested in the TSP funds.
        • Your contribution allocation will not affect money that is already in your account.

      Considerations for Members of the Uniformed Services

      • There are two separate TSP accounts – one for uniformed service members, and one for civilians employed by the federal government. It is possible for members to have both accounts.
        • These two plans share the same annual contribution limits across both accounts.
        • The only time you can go above the annual employee deferral limit is when you are called to active duty and deploy to a tax-exempt zone. At this point, you will be able to contribute up to the Annual Addition Limit of $58,000 (or $64,500 with catch-up contributions).

      Show More

      Coins in soil with plants growing on top of them
      • Uniformed Services TSP Contributions
        • Uniformed service members are eligible to contribute any whole percentage of basic pay, as long as the annual total of the tax-deferred investment does not exceed the maximum contribution limit.
        • Uniformed service members also have the option of contributing any portion of their incentive pay, bonuses, or special pay so long as they contribute a portion of their basic pay.
        • Uniformed service members serving in tax-free combat zones can contribute up to $58,000.
          • Including regular deferred contributions, tax-exempt combat zone contributions, and special pay/bonuses.
      • TSP Federal Agency Contributions
        • Federal Civil Service members can also participate in the Traditional or Roth TSP. They have the same contribution limits.
      • Blended Retirement System (BRS)
        • Under the BRS, all service members who joined beginning in January 2018 are enrolled in the TSP with automatic and matching DOD contributions. After completion of two years of service, you are “vested,” having full ownership, and that money belongs to you. If you leave, it goes with you.
        • Members of the uniformed services only receive matching contributions if they participate in the BRS.


      Wooden block with alphabet building the word FEES

      TSP Fees

      • In 2020, the total expense ratios for the TSP’s individual funds were 0.049% (G Fund), 0.060% (F Fund), 0.051% (C Fund), 0.068% (S Fund), and 0.055% (I Fund).
      • The total expense ratios for the TSP’s Lifecycle (L) Funds range from approximately 0.049% to 0.060%.
      • As an example, a participant with $1,000 invested in the F Fund paid $0.60 in expenses; a participant with $100,000 invested paid $60 in expenses.
      • You can find the current expense ratios for all of the TSP funds on

      TSP News and Updates

      Federal Retirement Thrift Investment Board logo
      Thrift Savings Plan logo