U.S. Marine Corps photo by Sgt Bobby Yarbrough) (This image was manipulated using filters.)
If you have a Thrift Savings Plan (TSP), you probably signed up for it at the start of your military career, and by now are dimly aware that a percentage of your monthly income contributes to the TSP savings plan. But since it’s always been that way, you haven’t thought much about it.
Now you’re transitioning. Do you know how much you’ve saved for retirement, whether you should rollover your TSP into an employer 401(k) plan or move your TSP to an IRA, and what all these acronyms and numbers mean? Here are quick answers to all your questions about thrift savings plan withdrawal, and how to decide whether to cash it out or not.
What is the TSP?
The TSP is a special type of Individual Retirement Account (IRA) maintained by the federal government and offered to federal employees.
Although service members have a 20-year pension plan, they can use the TSP as an alternate or supplemental plan. The TSP is a good deal because the federal government pays the administrative costs of the plan, so your money is never subject to fees for trading, account transfers or anything else.
It’s basically a free IRA for service members and other federal employees.