Thrift Savings Plan - TSP

AAA

DEFINITION of 'Thrift Savings Plan - TSP'

A retirement savings plan created by the Federal Employee's Retirement System Act of 1986 for current or retired employees of the federal civil service. The thrift savings plan is a defined-contribution plan designed to give federal employees the same retirement savings related benefits that workers in the private sector enjoy with 401(k) plans. Contributions to the plan are automatically deducted from each paycheck.

INVESTOPEDIA EXPLAINS 'Thrift Savings Plan - TSP'

The thrift savings plan offers six different funds (government security fund, fixed-income fund, common stock fund, small cap stock fund, international stock fund and a life cycle fund) in which employees can invest.

Benefits include agency matching contributions, agency automatic contributions, catch up contributions and low expense ratios. Because the thrift savings plan is based on tax-deferred contributions, any contributions made into it will not be taxed until the money is withdrawn, which can be deferred until retirement.

Similar to standard retirement plans, employees can easily move non-government related IRAs and 401(k) plans into the thrift savings plan and vice versa upon employment changes.

RELATED TERMS
  1. IRS Publication 721: Tax Guide ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. Agency Matching Contributions

    A benefit that federal government employees receive under the ...
  3. Agency Automatic Contributions

    A benefit that federal government employees receive for participating ...
  4. Federal Employee Retirement System ...

    A system that became effective in 1987 and replaced the Civil ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
Related Articles
  1. New Retirement Plan Limits For 2011
    Taxes

    New Retirement Plan Limits For 2011

  2. Retire In Style
    Savings

    Retire In Style

  3. The Demise Of The Defined-Benefit Plan ...
    Budgeting

    The Demise Of The Defined-Benefit Plan ...

  4. Thrift Savings Plan Helps Federal Workers ...
    Retirement

    Thrift Savings Plan Helps Federal Workers ...

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center