The numbers have not changed; the process (for matching) is going to for 2021….(read more)
LEARN MORE ABOUT: Thrift Savings Plans
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The Thrift Savings Program (TSP) is a retirement savings plan for federal government employees and members of the uniformed services. It was created to provide federal employees with an easy, low-cost way to save for retirement.
One of the best features of the TSP is that it allows for both regular and matching contributions. Regular contributions are the amounts of money that an employee chooses to contribute to their TSP account from each paycheck. These contributions can be made on a pre-tax or after-tax basis, depending on the employee’s preference.
Matching contributions, on the other hand, are contributions made by the employee’s agency or service, based on a percentage of the employee’s regular contributions. For example, an agency may offer to match 50% of the first 5% of the employee’s pay that they contribute to their TSP account.
Regular and matching contributions work together to help employees save more for retirement. By contributing regularly, employees are able to build their retirement savings over time. By receiving matching contributions from their agency or service, employees are able to accelerate their savings and accumulate more wealth.
It’s important to note that not all agencies or services offer matching contributions. The amount of the matching contributions also varies by agency or service. Employees should check with their agency or service’s human resources department to find out what their matching contribution policy is.
Even without matching contributions, regular contributions to the TSP can go a long way towards building a secure retirement. The TSP offers a variety of investment options, including index funds and target date funds, which allow employees to choose how they want their money to be invested. By choosing a mix of funds that align with their retirement goals and risk tolerance, employees can grow their TSP account and generate income for their retirement years.
In conclusion, regular and matching contributions to the Thrift Savings Program are a powerful way for federal employees and members of the uniformed services to save for retirement. By contributing regularly and taking advantage of matching contributions, employees can build a secure financial future and enjoy a comfortable retirement.
Seems like you have to contribute the max $19500 before you can do any catchup contributions and get that matching? For example, if you contribute $1000 per paycheck to TSP, on the 20th paycheck of the year, you get $500 into the catchup "pot" with 5% match, and 21st-26th checks of the year are only catchup contributions.