The Thrift Savings Plan (TSP) is a Federal Government-sponsored retirement savings and investment plan. The National Defense Authorization Act for Fiscal Year 2001 extended participation in the TSP, which was originally only for Federal civilian employees, to members of the uniformed services, and members began enrolling on October 9, 2001.
The TSP offers the same type of savings and tax benefits that many private corporations offer their employees under so-called "401(k)" plans. The retirement income that you receive from your TSP account will depend on how much you have contributed to your account during your working years and the earnings on those contributions.
But, it's important to remember the TSP is for long-term retirement savings. There are penalties for early withdrawals. So if you're looking short-term savings, consider U.S. Savings Bonds. They are a convenient way to help save for homes, education, automobiles, or vacations.
