Thrift savings plan an option for military members
Uniformed service members might want to take advantage of the TSP.
All branches of the military offer the Thrift Savings Plan (TSP) to members of the uniformed services. Whether you are in the Army, Air Force, Navy or Marines it is never too early to start preparing for the future. TSP is a defined-contribution plan that gives federal employees similar benefits to that of private sector workers who participate in 403b or 401k plans. According to www.tsp.gov, to receive assistance, all members of the uniformed services must establish their TSP by submitting a request form either through the services automated system or by completing Form TSP-U-1.
What is the benefit to starting a TSP at an early age? According to Wanda Roberts Michigan State University Extension educator, “Starting to think about retirement at an early age allows you to accumulate more wealth without having to worry about catching up later in life.” For example, if your yearly salary was $40,000, a 5 percent investment on your income would amass to roughly $154,000 after 20 years. Take that number and add 10 more years, your net worth value could reach $335,000. Over time, the savings will certainly add up.
Valuable information can be found in the Summary of the Thrift Savings Plan. Information in the summary include:
- How to establish a TSP
- Contribution information
- Agency contribution information
- How much you can contribute
- Tax liabilities
- Types of investments
- Loan, withdrawals and refund information
- Death benefits
Michigan State University Extension offers financial management and home ownership education classes. For more information on classes in your area, go to either http://msue.anr.msu.edu/events or www.mimoneyhealth.org.