1. What is the Thrift Savings Plan?

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the uniformed services. It offers similar benefits to private-sector 401(k) plans, with tax advantages and employer matching contributions.

2. How Does the Calculator Work?

The calculator uses the TSP growth formula:

Where:

• \( Contributions \) — Annual contribution amount (USD)
• \( r \) — Expected annual return rate (decimal)
• \( n \) — Number of years contributing
• \( Employer\ Match \) — Annual employer matching contribution (USD)

Explanation: The formula calculates compound growth of your contributions plus any employer matching funds.

3. Importance of TSP Planning

Details: Proper TSP planning ensures federal employees can maximize their retirement benefits through strategic contributions and investment choices.

4. Using the Calculator

Tips: Enter your annual contribution amount, expected return rate (typically 5-7% for balanced funds), years until retirement, and employer match amount.

5. Frequently Asked Questions (FAQ)

Q1: What's the maximum TSP contribution limit?
A: For 2023, the elective deferral limit is $22,500 ($30,000 if age 50+). There are separate limits for employer contributions.

Q2: How does the government match contributions?
A: FERS employees get 1% automatic contribution plus matching up to 5% of salary.

Q3: What investment options are available?
A: TSP offers lifecycle (L) funds, individual funds (G, F, C, S, I), and the option to create a custom mix.

Q4: When can I withdraw from my TSP?
A: Generally at age 59½ without penalty, though different rules apply for federal retirees.

Q5: How are TSP withdrawals taxed?
A: Traditional TSP withdrawals are taxed as income; Roth TSP withdrawals may be tax-free if conditions are met.