Your TSP: How to Make Your Money Work For You

Written by Cloud Spurlock, Federal Retirement Thrift Investment Board | April 9, 2021

Before your first paycheck from your very first job hit your bank account, you may have heard the good advice to “pay yourself first.” Of course, that didn’t mean you should go out and buy whatever what-have-you was on your wish list. Instead, it meant you needed to set aside money for someone else—someone who may as well have been a perfect stranger at the time—your future self.

For many people, that’s hard to do. Your budget might be tight when you’re first starting out, and it’s hard to prioritize the uncertainty of future needs over what you want now. If you’ve ever found yourself saving those decisions-about-saving for later, you’re definitely not alone.

But you are probably going to need some of your money later.

And the sooner you start saving, the easier it is to make sure you’ll have enough.

That’s why the Thrift Savings Plan (TSP) is designed to make saving simple from day one. In a few steps, you’re already on your way to being an expert in your financial future.

Step 1: Know how the TSP fits into your retirement plan

As a uniformed services member participating in the TSP, you were either automatically enrolled as part of the Blended Retirement System (BRS) that became available in 2018, or you signed up separately as part of a non-BRS plan.

BRS: Don’t leave free money on the table

If you’re in BRS, your TSP account is an essential part of your retirement benefit. That’s because you are—or will be after 60 days of service—eligible to receive up to 5% of your salary in automatic and matching contributions from your service. That’s like making money just by saving money! But you’ll only receive full matching contributions if you’re putting away at least 5% of your own basic pay each pay period, so make sure to maximize your TSP savings.

Until October 1, 2020, the initial contribution amount for new BRS members was only 3% of basic pay. If you joined before then, make sure you increase your contribution amount to at least 5% as soon as you can to get the full match. (If you joined after this date, your contribution amount was already set to 5%.)

Non-BRS: A bonus to your retirement income

If you’re part of a legacy military retirement plan (often referred to as the “High-36”), then you’re eligible to sign up for the TSP and make contributions from your paycheck each pay period. The TSP is a great opportunity to supplement your retirement income if you serve 20 or more years and receive a military pension. And if you decide to leave military service before that 20-year mark, your TSP savings will stay with you, even though you won’t receive a military pension. You can continue to manage your investments in low-cost TSP funds and watch your savings continue to grow.

Step 2: Manage your TSP investment funds and increase contributions over time

Your choice of TSP funds

When your TSP account is established with that first payroll contribution, your savings are automatically invested in a TSP fund:

If you want to keep your retirement savings strategy simple, it’s a great plan to stick with—or move to—an L Fund and let it do the investment work for you. Or, if you prefer to design and manage your own portfolio of core TSP Funds (G, F, C, S, and I), you can rebalance your investments periodically on your own. As long as your TSP account is active, you can change your TSP investment funds whenever you need to.

Set goals and increase contributions

As you progress in your career and earn promotions, keep that first-paycheck advice in mind and “pay yourself first” with every raise and other increases to your income. Did you know that the IRS establishes contribution limits each year? When you first start working, it may seem like a stretch to reach those limits. But many people do find it possible later in their careers, even if it’s not possible every year. Make it a goal to increase your contributions when you can until you max out those IRS limits. Your future self will thank you for saving as much as you can!

Step 3: Stay with the TSP, even if you leave service

It’s simple to get started with the TSP, and it’s even easier to stay. If you leave service before you retire, you can keep your money in the TSP and continue to watch your savings grow while taking advantage of low-cost TSP funds.

Plus, if you join the federal civilian workforce after you leave the military, you can keep contributing to the TSP each pay period.

Find out more

You can also find updated information and publications on, including the booklet Managing Your Account for Members of the Uniformed Services (pdf) and Important Tax Information About Payments From Your TSP Account (pdf). If you’re active duty, you can visit the Office of Financial Readiness for more resources, such as how to request a meeting with a Personal Financial Manager or Counselor.


As original work produced by the U.S. government, the text of this article is not subject to copyright and exists in the public domain.

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