Thrift Savings Plan

The Thrift Savings Plan (TSP) is the U.S. government’s version of a 401(k) retirement savings plan, for civilian federal employees and members of the uniformed services, including the Ready Reserve. Congress created it in the Federal Employees’ Retirement System Act of 1986, and it is run by an independent agency, the Federal Retirement Thrift Investment Board (FRTIB).

The TSP is a defined contribution plan. You decide how much of your pay to put into it and how to invest that money. What you’ll have at retirement depends on how much you (and your agency or service, if you’re eligible for matching) contribute over your career, and on how those investments perform.

The TSP is enormous: more than 7 million participants and over $1 trillion in assets. The FRTIB describes it as the largest defined contribution plan in the world. Most of that money is invested in the five core TSP funds: stock and bond index funds that are very tax-efficient and have some of the lowest fees you’ll find anywhere.

This page is an overview of how the TSP works, with links to more detail on each topic elsewhere on TSP Folio.

On this page:

• Who can participate in the TSP
• TSP contributions
• Agency and service matching contributions
• Traditional vs. Roth TSP
• The TSP funds
• Managing your TSP investments
• TSP loans and in-service withdrawals
• Leaving federal service and retirement withdrawals
• TSP drawbacks

Who can participate in the TSP

Almost every federal employee can join the TSP. That includes civilian employees covered by the Federal Employees Retirement System (FERS) or the older Civil Service Retirement System (CSRS), and uniformed services members on active duty or in the Ready Reserve, under either the Blended Retirement System (BRS) or the legacy military retirement system.

How the TSP fits into your retirement depends on which system covers you. For FERS employees, the TSP is one leg of a three-part retirement package, alongside the FERS basic annuity and Social Security. For CSRS employees and uniformed services members, the TSP supplements a CSRS annuity or military retired pay.

If you started or rejoined federal service on or after October 1, 2020, you were enrolled in the TSP automatically, with 5% of your basic pay going into the traditional (pre-tax) balance of your TSP account every pay period unless you chose otherwise. (BRS members are enrolled after 60 days of service.) Automatically enrolled participants are invested in the age-appropriate Lifecycle Fund until they choose their own investments.

TSP contributions

TSP contributions come straight out of your paycheck, as either a percentage of your pay or a fixed dollar amount per pay period. You start, change, or stop them through your agency’s or service’s payroll system (such as Employee Express, LiteBlue, or myPay), not through the TSP.

The IRS sets the annual TSP contribution limits and raises them over time for inflation. For 2026:

• Elective deferral limit: you can contribute up to $24,500, combining traditional and Roth contributions. Agency and service contributions don’t count toward this limit.
• Catch-up contributions: starting in the year you turn 50, you can contribute up to $8,000 more.
• Higher catch-up for ages 60–63: in the years you turn 60, 61, 62, or 63, the catch-up limit rises to $11,250.

Starting in 2026, there’s a new wrinkle for higher earners: if your wages from your federal employer were above $150,000 in 2025, any catch-up contributions you make must go into your Roth balance.

You can also move money into the TSP from other plans. The TSP accepts rollovers from traditional IRAs, SIMPLE IRAs, and eligible employer plans such as a 401(k) or 403(b), plus direct rollovers from Roth 401(k), Roth 403(b), and Roth 457(b) accounts. It does not accept money from a Roth IRA. Rollovers don’t count against the IRS contribution limits.

Agency and service matching contributions

If you’re covered by FERS or BRS, your agency or service adds money to your TSP account on top of your own contributions, in two parts:

• Agency/Service Automatic (1%) Contributions: 1% of your basic pay, every pay period, whether or not you contribute anything yourself.
• Matching contributions: up to another 4% of your basic pay. Your first 3% is matched dollar for dollar, and the next 2% at 50 cents on the dollar.

Together, that’s 5% of your salary from your employer, as long as you contribute at least 5% yourself. It’s essentially free money, so if you’re eligible for matching, try to always contribute at least 5% of your pay. If you’re on track to reach the annual limit, spread your contributions across the whole year. Matching is paid per pay period, so if you hit the limit early, your matching stops for the rest of the year.

Your matching contributions are yours immediately. The Automatic (1%) Contributions vest after 3 years of service for most FERS employees (2 years in certain positions) and after 2 years for BRS members. BRS members who joined on or after January 1, 2018, start receiving matching contributions after two years of service.

CSRS employees and uniformed services members who stayed in the legacy retirement system don’t receive any government contributions to the TSP. In return, they generally get a larger pension. Unlike a defined contribution plan such as the TSP, a pension is a defined benefit plan: your employer tells you up front what you can expect to receive in retirement, based on how long you served and how much you earned.

Traditional vs. Roth TSP

You can split your own TSP contributions between two tax treatments, and change the split whenever you like:

• Traditional TSP: contributions go in before income tax, which lowers your taxable income now and puts more of your money to work. You pay ordinary income tax on both contributions and earnings when you withdraw them in retirement.
• Roth TSP: contributions go in after tax. Withdrawals of your Roth contributions are always tax-free, and so are the earnings once five years have passed since your first Roth contribution and you’re at least 59½ (or disabled or deceased). Roth balances are also exempt from required minimum distributions.

Agency and service contributions always go into your traditional balance, whichever option you choose for your own money.

The right mix mostly comes down to whether you expect your tax rate to be higher now or in retirement, which is impossible to know for certain. You don’t have to get it right on day one, though. Most of us have higher- and lower-income years over a career, and since January 2026 the TSP has offered Roth in-plan conversions: you can move money from your traditional balance into your Roth balance, paying income tax on the converted amount that year. You have to pay that tax from savings outside the TSP, and a conversion can’t be reversed, so it’s worth talking to a tax advisor first.

The TSP funds

The TSP keeps investing simple. There are 16 TSP funds in all: five individual index funds, plus 11 Lifecycle Funds that combine them.

The five individual funds

• G Fund: invests in special-issue U.S. Treasury securities available only to the TSP. Its principal is guaranteed by the U.S. government, so it can’t lose money. It earns an interest rate that resets every month, based on yields of Treasury securities with 4 or more years to maturity. The TSP G Fund interest rate for October 2026 is 5.375%. See also how the G Fund has performed against inflation.
• F Fund: tracks the Bloomberg U.S. Aggregate Bond Index, a broad mix of U.S. government, corporate, and mortgage-backed bonds.
• C Fund: tracks the S&P 500 index of large U.S. companies.
• S Fund: tracks the Dow Jones U.S. Completion Total Stock Market Index, which covers the small and mid-sized U.S. companies that aren’t in the S&P 500. Together, the C and S Funds cover the whole U.S. stock market.
• I Fund: tracks the MSCI ACWI IMI ex USA ex China ex Hong Kong Index, which covers thousands of companies in developed and emerging markets outside the United States (excluding China and Hong Kong).

Lifecycle (L) Funds

Each Lifecycle Fund is a ready-made mix of the five individual funds, designed so you can invest your entire account in one fund. The target-date L Funds start out mostly in stocks and become more conservative every quarter as their target date approaches. When an L Fund reaches its target date, its money moves into the L Income Fund, which is meant for TSP participants who are already withdrawing from their accounts. The TSP rebalances every L Fund back to its target allocation at the end of each trading day.

Low costs

All TSP funds are cheap to own. The C Fund’s expense ratio is 0.035%, or $0.35 a year for every $1,000 invested, and the TSP reports that its expenses are lower than 99% of investment options. You can look up past prices for every fund in our TSP share price history.

The Mutual Fund Window

Since June 2022, the TSP Mutual Fund Window has let participants invest up to 25% of their account in mutual funds outside the core TSP lineup, if they have at least $40,000 in their account. It costs extra, though: $132 a year plus $28.75 per trade, on top of each mutual fund’s own expenses. It’s one way to add asset classes the TSP funds don’t cover. Browse the list of all funds available in the TSP Mutual Fund Window.

Managing your TSP investments

There are two ways to control how your TSP account is invested:

• Investment election (contribution allocation): decides how new money is invested, including your paycheck contributions, agency contributions, rollovers, and loan payments.
• Interfund transfer (IFT): moves money you’ve already invested, either by reallocating your whole account or by transferring money between specific funds. IFTs are tax-free, but they’re limited: in each calendar month, your first two can move money between any TSP funds. After that, you can only move money into the G Fund until the next month.

To change your TSP fund allocation, log in to My Account on tsp.gov and request an Interfund Transfer. It only takes a few minutes.

TSP loans and in-service withdrawals

While you’re still working for the federal government, there are two ways to get at your TSP money before retirement.

TSP Loans: you can borrow from your own contributions and their earnings (not agency or service money), and pay the loan back with interest through payroll deduction. You can borrow between $1,000 and $50,000, subject to limits based on your balance. A general purpose loan can be used for anything and is repaid over 12–60 months, with a $50 fee. A primary residence loan is only for buying or building the home you’ll live in, and is repaid over 61–180 months, with a $100 fee. The interest rate is the G Fund rate for the month before you apply, and it stays fixed for the life of the loan. The current TSP loan interest rate is 4.875%. Use our TSP loan calculator to estimate your payment per paycheck and what the loan may cost you in lost growth.

In-service withdrawals: you can make a financial hardship withdrawal if you have a qualifying financial need, or an age-59½ withdrawal (up to four a year) once you reach that age. Unlike a loan, a withdrawal permanently reduces your retirement savings. It’s usually taxable, and if you’re under 59½ it may also be subject to a 10% early withdrawal penalty. If you’re a married FERS employee or uniformed services member, your spouse has to consent.

Leaving federal service and retirement withdrawals

When you leave federal service, you can no longer contribute to the TSP, but you don’t have to take your money out. As long as your vested balance is at least $200, you can leave it in the TSP, keep managing your investments, keep paying its low fees, and even roll money in from other plans. Any Automatic (1%) Contributions that haven’t vested when you leave are forfeited.

When you’re ready to take money out, you have several options, and you can combine them:

• Partial withdrawals of $1,000 or more, whenever you need them.
• Installment payments monthly, quarterly, or annually, while the rest of your account stays invested.
• A life annuity bought through the TSP’s annuity provider, which pays you a guaranteed monthly income for life in exchange for giving up control of that money.
• A total withdrawal of your whole account, which you can also roll over to an IRA or another employer’s plan.

Eventually the IRS requires you to start withdrawing from your traditional balance once you’ve left federal service. These required minimum distributions (RMDs) start at age 73 if you were born before 1960, and at age 75 if you were born in 1960 or later. TSP Roth balances aren’t subject to RMDs.

TSP drawbacks

There’s a lot to like about the TSP, but it has some shortcomings too:

• Limited core investment choices. The five individual funds and 11 Lifecycle Funds cover U.S. stocks, international stocks, and U.S. bonds well. They don’t include asset classes such as real estate (REITs), inflation-protected bonds (TIPS), high-yield bonds, or commodities and precious metals. The Mutual Fund Window fills some of those gaps, but at a noticeably higher cost than the core funds.
• Interfund transfer limits. After your first two IFTs in a month, you can only move money into the G Fund. That’s no problem for long-term investors, but it rules out frequent trading.
• Not everyone gets a match. CSRS employees and uniformed services members in the legacy retirement system get no agency or service contributions. If that’s you, the TSP’s low fees are still compelling, but without a match there’s no “free money” reason to put the TSP ahead of other options such as an individual Roth IRA account.
• No new contributions after you leave. Once your federal service ends, you can’t add to your account from your paycheck. You can still roll in money from other plans, or move your TSP savings to an IRA or a new employer’s 401(k).

Stay on top of your TSP

TSP Folio tracks every TSP fund, every trading day, and sends email updates so you don’t have to log in to tsp.gov to see how your funds are doing.