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New Jersey Department of Military and Veterans Affairs
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Employee Relations » TSP


The Thrift Savings Plan is a retirement savings plan for FERS and CSRS employees similar to “401 K” plans available in private sectors.  FERS technicians must consider the TSP as a major component of their retirement and are strongly encouraged to maximize this benefit. Because your TSP account is a tax-deferred account, you cannot withdraw it until you leave federal service except in instances of extreme hardship or upon reaching age 59 1/2. An advantage of the TSP is that you pay no taxes on contributions or earnings until you withdraw your account. You are normally eligible to participate in the TSP beginning the first day of the pay period following receipt of your TSP election form (TSP-1) by the HRO. For FERS technicians the government automatically contributes the equivalent of 1% of your salary to your TSP account beginning the first pay period during the second open season after your entry on duty, whether you decide to contribute or not. If you choose to contribute to the TSP, the government will match your contributions up to 3% of your salary, and will contribute 50 cents on the dollar for the next 2%. Government contributions stop at 5%. You can contribute additional funds in accordance with the current rules. You may elect to have up to 10% of your military base pay go into TSP.   For up-to-date information on TSP see the web site at www.tsp.gov.

The purpose of the TSP is to provide you with a source of income for your retirement. It is not a savings account that can be withdrawn at any time.  If you think you may need your money in the near future, or if you do not have other funds saved for emergencies, you will want to consider your other needs carefully before deciding how much to contribute to the TSP. However, while you are still employed by the Federal Government, the TSP loan program can provide you access to funds you have contributed to your account. In addition, participants who are age 59 1/2 or older can make a one-time withdrawal from their TSP accounts while they are in Federal service. For more information on withdrawals and on loans visit TSP website at www.tsp.gov or contact your HRO. You may withdraw from your TSP account upon separation from federal service. However, if you withdraw funds from your TSP account, you may be subject to an early withdrawal penalty and the funds received will be considered taxable income.



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