There are a number of types of retirement plans available in civilian life for people that work for companies, and for the military there is a government sponsored retirement and investment plan. Active Duty Servicemembers are eligible for a retirement and investment plan called the Thrift Savings Plan. This is a plan that was revised and extended by the Department of Defense with the Authorization act of 2001. It is opened up to all members of the Armed Forces available on active duty. It is similar in many different ways to a typical civilian 401 K type savings plan, and the income that you receive at military retirement will be based on the amount of contributions and the type you have made to your TSP during your military career.
This is a savings and benefit plan that is lucrative and is a good way to save for retirement long term. It is not a program that has any short-term benefits. There are plans for retirement savings that work with the military, and the Thrift Savings plan works for the benefit of the Servicemember. If you contribute to a TSP plan on a regular basis then you will realize income and retirement benefits that are compounded each year that you have an account. It is an account that is backed by the United States Government. The Thrift savings plan is an excellent choice for investment dollars, and it is an agency contribution account. This means that no matter which of the five services you serve in it will provide a matching fund contribution. All participants in the TSP program you have an automatic 1 percent matching amount. All different participants in the TSP program have an amount that is added to the automatic 1 percent. The amount added by your branch of the Military service varies, and the different matching funds add up. Even a small contribution on the part of the Servicemember soon multiplies with the matching funds that are added to it.
For example if you put a $10 dollar amount in your account 2 times a month for 25 years, and it is matched 100 percent by your service branch, at the end of the 25-year period you will have about $35,000 dollars. You can contribute up to 100 percent of your base pay but you are limited by the amount allowed yearly to $15,500 dollars a year. This is the amount allowed by the IRS each year.