One of the benefits available to active duty enlisted Military Servicemembers is the Thrift Savings plan program. It is a savings plan that was specifically designed for active duty Servicemembers to benefit from and to use. The Congress and the United States Government created it for the use by Armed Forces members in the United States. It has the advantage of having numbers, with several million investors and it is an insured type of government investment savings program that can be advantageous and lucrative.
The actual type of benefits for the military investor are much like the different types of civilian 401 (k) type retirement savings plan, but this is a plan ran by the Federal Retirement Thrift Savings Board of Investment. The benefits that are realized by participants in the plan depends directly on the amount that the individual sets aside from their income and the amount that the service or agency that the individual belongs to matches. The advantage is that the Federal Government makes matching and automatic contributions to savings plans and individual accounts depending on the amount that is set aside and on the ruled governing the savings.
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The more that an individual decides to contribute then the more that the Federal Government will match, up to a certain amount. The greater the individual contribution the greater is the amount that the Federal Government will match. The amount limitation is not made by the military, or even the TSP authorities, but rather by the IRS. The IRS says that the amount of your pay that you can receive matching funding for is capped at 5 percent.
The nice thing about the Thrift Savings Plan is if you participate from the very first it is almost like not having the money in the first place, you will never miss the money if you have always had it deducted. Its an excellent way to save and a good plan to put away money for retirement. The plan is tax differed, and when you reach retirement age you will most likely be in a different level of tax bracket than the one you are currently in, and when you receive benefits from the TSP you can pay at the lower tax bracket amount.