The Thrift Savings Plan is the retirement savings account for U.S. service members and federal employees. It works like a private-sector 401(k), but with rock-bottom fees, government matching for most participants, and a small menu of clean, well-built funds. If you serve under the Blended Retirement System, your TSP is one of the most important parts of your future paycheck.
This guide walks through everything you need to know about the Thrift Savings Plan in 2026. We cover contribution limits, BRS matching, Roth vs Traditional, every individual fund, the Lifecycle (L) funds, TSP loans, withdrawals, and rollovers. Use it as a hub and follow the internal links for deep dives.
What is the Thrift Savings Plan?
The Thrift Savings Plan is a defined contribution retirement plan created by Congress in 1986. It is administered by the Federal Retirement Thrift Investment Board, an independent federal agency. As of 2026, TSP holds more than $900 billion in assets across nearly 7 million participants.
TSP is a core piece of military retirement for anyone on the Blended Retirement System. It pairs with the BRS defined-benefit pension and the lump-sum continuation pay bonus. For federal civilians, TSP works alongside FERS basic pay and Social Security.
The plan is famous for two things: extremely low expense ratios (often under 0.05%) and a simple investment menu. You will not find dozens of overlapping mutual funds here. You pick from five core funds, a set of target-date L funds, or a mutual fund window for an extra fee. Read the official overview at tsp.gov.
Who is eligible
You can contribute to TSP if you fall into one of these groups:
- Active-duty members of the Army, Navy, Marine Corps, Air Force, Space Force, and Coast Guard
- Members of the Ready Reserve and National Guard in paid status
- Federal civilian employees under FERS or CSRS
- Certain other federal categories, including some judicial and legislative branch employees
Service members who joined on or after January 1, 2018, are automatically enrolled in BRS and get TSP matching. Members who joined before 2018 and opted into BRS also receive matching. Legacy (High-3) retirees can still contribute but do not get the service match. For background, see our Blended Retirement System explainer.
2026 TSP contribution limits
The IRS adjusts elective deferral limits each year. For 2026, the numbers are as follows.
| Limit | 2026 amount | Who it applies to |
|---|---|---|
| Elective deferral (§402(g)) | $24,500 | All TSP participants |
| Age 50+ catch-up (§414(v)) | $8,000 | Participants age 50 or older |
| Super catch-up (ages 60-63) | $11,250 | Participants turning 60-63 in 2026 |
| Annual additions limit (§415(c)) | $72,000 | Includes matching, automatic 1%, and combat zone contributions |
The elective deferral limit is the combined cap on Roth and Traditional contributions from your own pay. BRS matching and the automatic 1% do not count toward that $24,500. They count toward the separate $72,000 annual additions ceiling. For source detail, see the official TSP 2026 limits bulletin and the elective deferral fact sheet.
SECURE 2.0 Roth catch-up rule
Under Section 603 of SECURE 2.0, any catch-up contribution must be Roth if your prior-year FICA wages exceeded $150,000 and you have already hit the $24,500 traditional limit. This mostly affects senior civilians, but high-ranking officers should watch the threshold too.
TSP matching under BRS
If you are under the Blended Retirement System, the government adds money to your TSP every pay period. The match has two pieces.
- Automatic 1%. Your service contributes 1% of base pay, even if you put in nothing. This starts after 60 days of service.
- Matching up to 4%. Dollar-for-dollar on the first 3% you contribute, then 50 cents on the dollar for the next 2%.
Contribute 5% of base pay every pay period and you get a 5% match. That is an instant 100% return on your first 3% and 50% on the next 2%. It is the best deal in your military pay package.
Watch out for the early max-out trap
The TSP match is calculated each pay period, not annually. If you hit the $24,500 limit in October, your contributions stop for the rest of the year, and so does your match. Spread contributions across all 12 months to capture the full 5%. The TSP contribution types page walks through this in detail.
Vesting
You are immediately vested in your own contributions and the agency match. The automatic 1% requires 2 years of service to vest. Leave before then and you forfeit the 1% bucket only.
Roth TSP vs Traditional TSP
TSP gives you two tax buckets. You can split contributions between them. The match always lands in the Traditional side, even if your contributions go to Roth.
| Feature | Traditional TSP | Roth TSP |
|---|---|---|
| Tax on contributions | Pre-tax (lowers taxable income now) | After-tax |
| Tax on qualified withdrawals | Ordinary income tax | Tax-free |
| Income limits | None | None (unlike Roth IRAs) |
| Best for | Higher current tax bracket than retirement | Lower current bracket, or want tax-free retirement income |
Most junior enlisted and junior officers benefit from Roth TSP. Their current tax bracket is low, and tax-free Basic Allowance for Housing means a big slice of their compensation is already untaxed. A Roth TSP locks in today's low rates and grows tax-free for decades.
Combat zone bonus
If you contribute to Roth TSP while in a tax-exempt combat zone, that money is never taxed at any stage: not going in, not growing, and not coming out. This is one of the most powerful tax breaks in the U.S. code.
The TSP funds: G, F, C, S, I, and L
TSP keeps the menu short on purpose. You pick from five core funds plus a set of Lifecycle (L) funds. There is also a Mutual Fund Window that lets you invest in outside funds for an annual fee, though most participants do not use it.
The five core funds
| Fund | What it holds | Risk |
|---|---|---|
| G Fund | Government securities. Principal never loses value. | Lowest |
| F Fund | U.S. investment-grade bonds (Bloomberg U.S. Aggregate Index). | Low |
| C Fund | Large U.S. stocks (S&P 500 index). | Moderate-High |
| S Fund | Small and mid-cap U.S. stocks (Dow Jones U.S. Completion Index). | High |
| I Fund | International developed and emerging market stocks (MSCI ACWI IMI ex USA ex China ex Hong Kong). | High |
Lifecycle (L) funds
L funds blend the five core funds into a single age-appropriate portfolio. The mix shifts toward bonds and the G Fund as the target year approaches. TSP offers L Income and dated funds in 5-year increments (L 2030, L 2035, L 2040, and so on out past 2070).
L funds are a strong default for service members who do not want to rebalance manually. Pick the one closest to the year you expect to start withdrawing money. For more on choosing, see the military retirement hub.
TSP loans
You can borrow from your TSP balance and pay yourself back with interest. There are two loan types.
- General purpose loan. Repaid in 1 to 5 years. No documentation of use required.
- Primary residence loan. Repaid in up to 15 years. Documentation of home purchase required. Cannot be used for refinancing or repairs.
The interest rate equals the G Fund rate at the time you take the loan. There is a $50 loan fee. You can borrow $1,000 minimum and up to 50% of your vested balance, capped at $50,000.
The hidden cost
Borrowed money is out of the market while you repay. If the C Fund returns 12% that year and your G Fund loan rate is 4%, you lose the difference. Worse, if you separate from service with an outstanding loan, you generally must repay it within 90 days or it becomes a taxable distribution. Read our explainers before borrowing.
Withdrawals and required minimum distributions
You can leave money in TSP after separation, take partial withdrawals, set up monthly installments, buy a life annuity, or roll the balance out. Most withdrawal flexibility unlocks once you separate from federal service.
The age 59½ rule mirrors other tax-advantaged accounts. Earlier withdrawals usually trigger a 10% penalty on top of income tax. Exceptions include separating from service in the year you turn 55 or later, qualified public safety officer rules, and certain disability situations.
Required minimum distributions (RMDs) start at age 73 under SECURE 2.0. The age moves to 75 starting in 2033. RMDs apply to Traditional TSP balances. Roth TSP no longer has RMDs as of 2024 thanks to SECURE 2.0.
If you are planning your post-service income, our military retirement calculator can project pension, TSP, and Social Security together.
TSP rollovers
You can roll money into TSP from eligible plans like a 401(k), 403(b), or Traditional IRA. You can also roll money out after separation to an IRA or new employer plan.
Direct rollovers move money trustee-to-trustee. They avoid the mandatory 20% federal withholding and never count as income. Indirect rollovers send the check to you and require you to redeposit within 60 days, or the IRS treats it as a taxable distribution.
Reasons to roll TSP out include access to more fund choices, Roth IRA conversion strategies, and consolidating accounts. Reasons to keep TSP include the ultra-low expense ratios, the unique G Fund (you cannot replicate it elsewhere), and strong creditor protection.
Smart TSP strategies
1. Hit at least 5% every pay period
If you are under BRS, 5% is the floor. Anything less is leaving free money on the table. This is the single biggest move you can make for retirement.
2. Use Roth TSP when your tax bracket is low
Most enlisted members and junior officers should default to Roth. The tax savings of Traditional are small now, and tax-free growth compounds enormously over a 30 to 40 year career.
3. Coordinate TSP with VA benefits
If you expect to receive tax-free VA benefits like a disability rating, your retirement-era tax bracket may be lower than today. That changes the Roth vs Traditional math. Check out our VA claims guide and the VA disability rating calculator when planning.
4. Avoid early max-out under BRS
Calculate your per-pay-period percentage so contributions last all 12 months. This worksheet shows the math for officers and enlisted at every grade.
5. Layer Roth IRA on top
The 2026 Roth IRA contribution limit is $7,500 ($8,600 at age 50+). Maxing both TSP and a Roth IRA puts you on a millionaire glide path well before retirement.
6. Protect your family
TSP balances pass to a designated beneficiary outside of probate. Keep your TSP-3 beneficiary form current, especially after marriage, divorce, or the birth of a child. Pair this with SGLI, VA life insurance, and VA survivor benefits for full family protection.
Bottom line
The Thrift Savings Plan is the best retirement deal most service members will ever get. With a 5% government match under BRS, dirt-cheap funds, and Roth contributions that pair beautifully with tax-free combat zone pay, TSP can quietly build seven figures of wealth over a career. The only requirement is showing up every pay period.
If you have not logged into your TSP account at tsp.gov recently, start there. Then run the numbers in our military retirement calculator to see how today's contribution rate translates into tomorrow's paycheck. For the bigger picture, jump to the military retirement hub or explore the GI Bill and DIC benefits guides.
This page is educational and is not investment, tax, or legal advice. For personalized planning, consult a fiduciary financial advisor or a tax professional.
See also: Roth vs Traditional TSP: Which Is Better for You in 2026?