Thrift Savings Plan (TSP)

Thursday December 14, 2006

The Thrift Savings Plan (TSP) is a government-sponsored savings and investment program that offers tax-deferred opportunities similar to the civilian sector's 401 (k) plan. All Soldiers have the opportunity to participate in TSP at any time.

Soldiers can make tax-deferred contributions to a variety of professionally managed funds, with the opportunity to build solid savings and returns for the future. The TSP offers L Funds or Lifecycle Funds which provide a time-targeted professionally determined investment mix among the individual TSP funds. The L Funds are ideal for all Soldiers, in addition to those who don't have the knowledge or time to devote to managing investments among the TSP funds. Returns for the L Funds for the last 12 months ending 30 November 2006 ranged from 7.55 % to 16.54 % for the five L Funds.

For the Soldiers that want to manage their own account, TSP offers five individual funds. Soldiers can choose one or more funds and decide what percentage to invest in each.

Soldiers may contribute any percentage of basic pay, special pays, and incentive pays, to include bonuses, to their TSP account. The tax-deferred contribution limit for 2006 is $15,000 and $15,500 for 2007. Soldiers can also make contributions from tax-free income while deployed to a combat zone tax exclusion area. Any contributions made while in a CZTE area are tax exempt upon withdrawal (only the investment earnings are taxed upon withdrawal). The total limit for tax-deferred and tax exempt contributions is $45,000 for 2007.

To open an account, go to my pay website. Once a Soldier signs into myPay, he or she can select the TSP option to start, change, or stop contributions. Soldiers may also submit Form TSP-U-1 through their finance office. A copy can be downloaded by clicking here.

For additional information:
my pay


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"The troops deserve the solid commitment of the commander in chief and our political leaders and the American people. You have my unshakeable commitment in this important fight to help secure the peace for the long term."-President George W. Bush said in a Dec 12 meeting with senior defense officials at the Pentagon.


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