MARINE CORPS AIR STATION IWAKUNI, Japan -- Service members preparing for future financial security are in good hands.
The Thrift Savings Plan is a retirement savings and investment plan for Federal employees. The purpose of the TSP is to provide retirement income. It offers Federal employees, including members of the uniformed services, the same types of savings and tax benefits that many private-sector corporations offer their employees under 401(k) plans.
“The Thrift Savings Plan is great for military members of all ages because it is flexible and can be customized to fit a variety of goals and needs,” said Stephanie Sutton, Personal Readiness and Community Support branch manager.
Sutton said there is not a minimum amount of money required to open a retirement account. Service members can choose to contribute any amount from one to nine percent of their basic pay. There is also an option to contribute bonus, special and incentive pay.
Thrift Savings Plan contributions are taken out of pay before taxes are computed, so less tax is paid. Federal taxes are deferred until withdrawal of money.
Sutton said TSP benefits can significantly increase retirement income, but starting early is important. Contributing to the account early will increase the compound interest over time.
According to Sutton, service members can choose from five different funds to invest their money. Funds range from no risk of loosing money to higher risk funds. The option is left up to service members to transfer money and change funds at any time without penalty.
If a service member separates from the military, there are options on how the money will be handled. It can be left in the TSP, transferred to an employer’s 401(K), or transferred into a traditional IRA. All of these options are penalty free.
“This plan is a great way to save for retirement without having to do a lot of research or have a background in financial planning,” Sutton said. “Service members can get started online through their ‘My Pay’ account. There is a link that will allow personnel to select the amount they want to contribute and to monitor the account.”
Sutton said service members can enroll upon entering the Marine Corps or during open season. Open seasons are held annually from April 15 through June 30 and October 15 through December 31.
With specific questions about the TSP, service members can contact their command financial specialist or the personal Financial Management Program located at the Marine and Family Services office in Building 411. Additional information can be found at the Thrift Savings Plan website www.tsp.gov.