Editor’s note: Feb. 22-28 is Military Saves week and your BBB serving Central, Coastal, Southwest Texas and Permian Basin will have daily posts highlighting ways to save money. While these tips are written with military members and their families in mind, these are valuable savings tips for all consumers.
Thinking about retirement, especially when you’re young, may seem like something that you shouldn’t think about well into your 40s.
However, the earlier you start the more you can save.
One thing you want to keep in mind is the Thrift Savings Plan.
What is the Thrift Savings Plan
According to tsp.gov, the TSP is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. Established in 1986, the plan offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
The TSP is a defined contribution plan. This means the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are eligible to receive agency contributions) put into your account during your working years and the earnings accumulated over that time.
But how does this all fit into your retirement plan?
Well, if you’re covered by the Federal Employees’ Retirement System (FERS), the TSP is one part of a three-part retirement package that also includes your FERS basic annuity and Social Security. But, if you are covered by the Civil Service Retirement System (CSRS) or are a member of the uniformed services, the TSP is a supplement to your CSRS annuity or military retired pay.
You can check with your personnel or benefits office if you’re unsure which retirement system you are under.
For more information on the TSP, click here.