Military? Millennial? Now is the Best Time to Contribute to the TSP

By Abigail C. Reid, Writer-Editor, Federal Retirement Thrift Investment Board

If you’re a millennial (born in or after 1982) in the military, you might encounter a number of financial challenges unique to your career path and age group. But as you face these challenges, one of your best opportunities to save for your future is with the Thrift Savings Plan (TSP). Below are the answers to some questions you might have about participating in the TSP.

What is the TSP?

The TSP is a long-term 401(k)-style retirement savings and investment plan that you can keep no matter where your career takes you. You can invest your money among the TSP’s 5 individual funds (G, F, C, S, and I), which cover most of the investment landscape.

Or you can invest in our Lifecycle (L) Funds, which do most of the work for you. For example, our experts designed the L 2050 Fund for people who plan to withdraw their TSP money in 2045 or later.

You can also make contributions from tax-exempt pay, basic pay, incentive pay, special pay, and bonus pay. Visit the Plan Participation section of to learn more.

If I’m going to get a military pension, why should I contribute to the TSP?

If you stay with the military for 20 years, you’ll get a monthly pension equal to about 50 percent of your average basic pay. However, if you leave the military before serving for 20 years, you won’t get a pension. Did you know that only about 17 percent of military personnel end up qualifying for a military pension? Because you don’t know where your career might take you, consider investing in your future with the TSP. Whether you serve for two years or 20, TSP benefits are yours to keep.

I’ve got financial concerns now – why should I contribute to the TSP?

According to a survey from the American Psychological Association, 80 percent of Millennial respondents aged 18-33 reported feelings of stress due to money. Contributing to your TSP account today can help you avoid stress down the road, and knowing that you’re investing in your future could relieve some stress now too.

Plus, you’re young. If you start saving now, even small contributions can mean big savings over time. Consider this:

Let’s say you’re an E-3 who decides to contribute 5 percent of your basic pay to your TSP account. You’d end up contributing about $90 a month. If you separate from service after four years (age 22), you’ll have contributed a little over $4,000. If you do nothing but let your money grow in the L 2050 Fund until age 65 (assuming a 6 percent average annual return), your account could grow to be worth about $59,618 at retirement.

How do I sign up for the TSP or change how I’m currently contributing?

Log into myPay. You’ll see a special section for the TSP—click there. Then, you can enter the percentage of your pay that you would like to contribute (10 percent, for example), and if you want your money to be traditional and/or Roth. Roth means you pay taxes on the money you save before it goes into your TSP account. So you pay no income taxes on your contributions when you take them out, and your earnings can also be tax-free if certain conditions are met.* Then click “Save” at the bottom of the screen. You may also download Form TSP-U-1 from the Forms & Publications section of and return it to your service.

Still have questions?

Visit or call the ThriftLine at 1-877-968-3778. Or visit, where you’ll find short, educational videos including “The TSP: What’s it All About?” for uniformed services. The TSP is also on Twitter @tsp4gov.

*Roth earnings are paid tax-free if 1) you have reached age 59 ½ or have a permanent disability and 2) five years have passed since the year of your first Roth contribution.

Tip of the Day

  • Written by Katie Bryan | November 28, 2013

    Set a goal, make a plan, #save automatically - pledge to save today!

Saver Stories View all »

Setting a Goal Leads to Success

Written by Super User | May 24, 2019

Growing up, Marisa’s dad had always talked about saving first, but she said she didn’t really internalize it until much later. “I was drifting along with no plan, carrying a little bit of revolving debt, saving some money here and there, but without a real plan for it.”


From Shopaholic to Saver

Written by Jackie Toops | January 13, 2021

Many of us spend too much money on things we don’t need, but we don’t always know why. It’s easy to get a quick fix from retail therapy, but before we know it, our hard-earned money is gone. Oftentimes, when we engage in a “shopaholic” lifestyle or sporadic shopping sprees, we still experience feelings of emptiness, but to make it worse, we now have debt, too.

Khanmany was a shopaholic who turned everything around. She is active duty Navy and shares, “I was spending too much on things I didn't need. I was going shopping for no reason and was trying to fill a void. I was running up every credit card I owned to include Victoria's Secret, Military Star, Navy Federal, TJ Maxx, JCPenney, Macy's, USAA, and was only paying the minimum payments.”


Involving Kids in Family Finances

Written by | April 19, 2019


One of the best lessons we can share with our kids is about money. By middle school, kids should have a good understanding of how money works as well as the importance of saving.