The Thrift Savings Plan.
The 401(k) for federal employees, with the lowest fees on Earth.

Section 1 · TSP basics

The Thrift Savings Plan is the retirement savings plan for federal civilian employees and uniformed-services members.

Contribution limits

2026: $24,500 ($32,500 with the 50+ catch-up) verify×DON'T TRUST, VERIFYClaim: 2026 TSP elective-deferral limit is $24,500 with $8,000 catch-up at 50+.Verify at: tsp.gov ↗TSP follows the same IRC 402(g) limit as private 401(k)s..

Employer match (FERS only)

• FERS (Federal Employees Retirement System) employees: up to 5% match.
• Automatic 1% contribution even if you contribute nothing.
• Dollar-for-dollar match on your first 3%.
• 50 cents on the dollar for the next 2%.
• CSRS (Civil Service Retirement System, older system) employees: no match.

Section 2 · The TSP funds

Five core index funds with among the lowest expense ratios in existence (typically around 0.04%):

• G Fund: Government Securities. Unique. Earns long-term Treasury rates but is redeemable at any time with no price risk. The G Fund has no equivalent outside the TSP verify×DON'T TRUST, VERIFYClaim: The G Fund is invested in nonmarketable special-issue Treasury securities and is redeemable at par at any time.Verify at: TSP G Fund ↗G Fund earns the average yield of long-duration Treasury securities while pricing like cash. There is no commercial equivalent..
• F Fund: Fixed Income Index. Tracks the Bloomberg US Aggregate Bond Index.
• C Fund: Common Stock Index. Tracks the S&P 500.
• S Fund: Small Cap Stock Index. Tracks the Dow Jones US Completion Total Stock Market Index (everything in the US market outside the S&P 500).
• I Fund: International Stock Index. Tracks MSCI ACWI ex-US IMI Index (developed and emerging markets).

Lifecycle funds (L Funds)

Target-date funds that mix the core funds (L 2045, L 2050, etc.). Appropriate for hands-off investors.

Section 3 · Roth TSP

The Roth TSP works like a Roth 401(k):

• Contributions after-tax.
• Growth tax-free.
• Same contribution limits as Traditional TSP.
• Unlike Roth IRA: no income limits for Roth TSP contributions.

Roth TSP can be rolled to a Roth IRA at separation. An important option since TSP requires RMDs at 73 but Roth IRAs do not.

Section 4 · TSP loans and withdrawals

TSP loans

• Available but should be treated as last resort.
• Two types: general purpose (5 years) and residential (15 years for primary home).
• Repaid with after-tax dollars: a hidden cost.

In-service withdrawals

• Age 59½+: standard withdrawals.
• Financial hardship: limited circumstances.

Section 5 · TSP + pension planning (FERS three-part retirement)

FERS employees have a three-part retirement:

• TSP (like a 401(k)).
• FERS pension: 1% of high-3 salary × years of service (or 1.1% if retiring at 62+ with 20+ years).
• Social Security (FERS employees pay into and qualify).

The combination is powerful, but the TSP portion still matters. Maxing TSP contributions in the C/S/I funds during a 30-year career produces a multi-million-dollar balance with virtually no fee drag verify×DON'T TRUST, VERIFYClaim: FERS basic annuity formula is 1% of high-3 average salary per year of service (1.1% if retiring at 62+ with 20+ years of service).Verify at: OPM Retirement Services ↗FERS basic annuity computation is documented in CSRS/FERS Handbook..