Thrift Savings Plan Definition

The Thrift Savings Plan is somewhat similar to a 401(k) plan in broad detail, except that it is available for employees of the federal government. In general, the TSP is a government-sponsored, defined contribution retirement plan. The plan allows federal employees to save for retirement by making tax-deferred contributions. The contributions are withheld from the paycheck and they are matched in part by the federal government. Matching funds are subject to a vesting period. In general, taxes are paid on the TSP as funds are withdrawn at or after retirement.