Saving for your retirement has many advantages.
- Traditional (pre-tax) or Roth (after-tax) Contributions: Traditional contributions come out of your pay before tax, and investment earnings are tax-deferred. Roth contributions come out of your pay after-tax and are tax-free when withdrawn. Earnings on Roth contributions are paid tax-free when withdrawn as long as certain IRS rules are met.
- Minimal Cost: You pay very low administrative and investment expenses.
- Agency Automatic Contributions: If you are covered by FERS and contributing your own money, you receive 1% of your basic pay each pay period automatically.
- Matching Contributions: If you are covered by FERS, you are eligible to receive up to an additional 4% of your pay from your agency.
- Catch-Up Contributions: If you are age 50 or older, you can contribute an amount that exceeds the elective deferral limit.
- Multiple Fund Investment Options: You have a choice of diversified investment funds or you can select from professionally designed lifecycle funds.
- Transfer Other Employee Plans Into TSP: If you already have tax-deferred money in a traditional IRA or another eligible employer plan, you can transfer those accounts into your TSP. You may also transfer in Roth money from an eligible employer plan.
- Loans: Under certain circumstances, you may be eligible to borrow from your account.
- In-Service Withdrawals: Under certain circumstances, you may be eligible to access your TSP savings while you are still employed by the Federal Government.
- Multiple Withdrawal Options: You have a variety of withdrawal options when you leave Federal service.
