The Thrift Savings Plan: Are You Contributing Yet?


Kisha A. Taylor, Writer/Editor

The Federal Retirement Thrift Investment Board

If not, what are you waiting for? You are eligible to contribute to the Thrift Savings Plan (TSP) as soon as you begin your military service. Saving for your retirement with the TSP makes sense no matter how many years you plan to serve in the military. If you leave the service before qualifying for a military retirement, the money in your TSP account can help jump start your wealth building. If you go the full 20, you’ll have your TSP income as a supplement to your military retired pay.

How do I start my TSP contributions?

Check with your service’s payroll office about its procedures for starting your TSP contributions. You must make your request through your service because your payroll office calculates the contribution and deducts the appropriate amount of money from your pay. You may be asked to use your service’s electronic system to begin contributing to a TSP account. If your payroll office allows you to use the paper version of the contribution election form, Form TSP-U-1, you can find it on the TSP website,  You can also request it from your service, or you can call the ThriftLine at 1-TSP-YOU-FRST (1-877-968-3778) and have it sent to you.

How can I change my TSP contributions?

You can use the same method to change your contributions as you did to start your contributions.

What type of pay can I contribute to my TSP account?

As a military member, you have four potential sources of employee contributions: basic pay, special pay, incentive pay, and bonus pay. You must elect a percentage of contributions from your basic pay in order to also make contributions from your special pay, incentive pay, and/or bonus pay. You cannot make contributions to the TSP from your housing or subsistence allowance.

You can make two types of contributions to your TSP account: traditional (tax-deferred) and Roth (after-tax).

Traditional contributions come out of your pay before your income is taxed. The money grows in your account tax-deferred, but when you withdraw it, you pay taxes on both the contributions and their earnings. With Roth (after-tax) contributions, you pay the taxes up front, which means you will not pay any taxes on them at withdrawal. In addition, you will not have to pay taxes on the earnings as long as they are considered “qualified” by the Internal Revenue Code (IRC) requirements.1

Furthermore, you can make contributions from tax-exempt pay earned in a combat zone, which can really add up if you choose to make Roth contributions. You are not paying taxes on your contributions, so why pay taxes on their earnings?

Are there limits to how much I can contribute?

You can contribute as little as 1% of your pay each pay period or as much as the IRC allows each year. The TSP announces the contribution limits on the TSP website, and the ThriftLine, as well as through its various publications when the limits become available.

Contribution limits

If you’ve been putting off contributing to your TSP account, wait no longer. Contact your payroll office to begin making contributions. For more information about the Plan and its benefits, visit our YouTube channel: YouTube@TSP4gov and follow us on Twitter @tsp4gov.


1 The earnings on your Roth contributions become “qualified,” and are therefore paid tax-free, as long as 5 years have passed since January 1 of the calendar year when you made your first Roth TSP contribution (also known as the 5-year rule) AND you are at least age 59½ or are permanently disabled.

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