When you are in the military one of the issues is to make sure that you are ready for retirement. The Federal government makes available to all Active Duty Servicemembers a government sponsored investment and retirement savings plan called the Thrift Savings plan. It is a program that gives a person a lucrative method of saving for retirement, that is often competitive with private sector methods, such as 401 (K) and IRA type retirement savings.
The Federal Government has worked to update and refine the Thrift Saving Military plan, as recently as 2001. It is very much akin to other types of savings plans, but one that is reserved for the US Military. If you are interested in more short term type of savings plans, other plans such as Savings Bonds may be more what you are needing. This is a lucrative savings benefit plan, but it is for long-term retirement type benefits. This is not a short-term benefit by any means. It is similar in many respects to a typical 401 (k) type savings plan, and the income that you realize at your time of retirement will depend on the type and amount of contributions you have made to your TSP during your working years. So it is worth your while to consider the benefits of the Thrift Savings Plan. Retirement may seem a long time off, but it can catch up to you fast, and the Thrift Savings Plan is a good way to hedge against the day when you do retire. You can tribute up to 100 percent of your base pay, but you are limited by the IRS to only contribute up to $15,500 each year. This is a plan that was extended by the DoD Authorization act of 2001, and opened up to all members of the Armed Forces at that time. Amounts vary, but even a small contribution can mount up. All participants in the TSP program have an automatic 1% percent matching amount, which is added to the amount that your agency, or your branch of the service matches. The Thrift Savings Plan is an excellent choice for your investment dollars.
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If you are willing to contribute on a regular basis to the plan then the income you will realize upon your retirement will be considerable. As with most types of retirement savings plans, there are penalties for early withdrawals, but if you want to have something that is backed by the United States government. Each of the five services, in addition to the civilian federal agencies that support the Thrift Savings plan programs, work to have a matching fund contribution.
Debra Bolander says
My husband worked for the Navy for 25 years before the company he worked for was bought by Raytheon. Naval Avionics Center in Indianapolis, Indiana. He passed away in 1999 and I am looking into his retirement benefits, since I am now over 55. I would like to know who to contact to look into availability and what steps are necessary to take. Please send any comments or suggestions . Thanks,
Widow of Charles Michael Butcher