Saving For Retirement With A TSP

Saving For Retirement: Military

After 20 years of active service in the U.S. Military, retirement is voluntary. The military pension can be collected regularly as soon as duty is over. This can happen as early as 37 years old. The military retirement system is a great retirement deal. But it could be made surprisingly better with the introduction of a thrift savings plan.

Saving for retirement is no less needed for military personnel that it is for civilians and all possible investments and preparations should be visited. The Thrift Savings Plan (TSP) allows for members of the uniformed services to participate in the same type of saving and tax benefits that many private sector employee 401(k) plans offer. In many ways the TSP can be a better investment.

The TSP is a defined contribution plan. This means your retirement income received from it depends on how much you put into it during the years of service and the earnings accumulated over that time. Your agency, if you are eligible to receive agency contributions, will also be a factor. The agency is responsible for determining your retirement coverage. They are also tasked with reporting to the record keeper the dollar amount of contributions to your account each pay period.

Prior to Jun 22, 2009, Federal Employee Retirement Systems (FERS) employees were not allowed to join a TSP until a year of service was completed. Now, contributions can be made starting with day one of employment and matching contributions are eligible once payments to the TSP start.

For more information on Thrift Savings Plan accounts and what your retirement cornerstone should look like, visit TSPaccount.com.