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Please compare a thrift savings plan (TSP) to a 401(k) and an IRA. What are the difference?


The BIDaWIZ Team's Answer:

For a TSP account, you need to be a government employee, which isn't the case for a 401(k) or IRA. TSP, 401(k) and traditional IRA accounts are tax-deferred accounts that are fundded with pre-tax contributions. A roth IRA on the other hand is after-tax and grows tax-free. The contribution limits for a TSP are the same as for a 401(k) ($17,500 for 2013) and with the bonus ($5,500 for 2013) for taxpayers 50 or older. However, with a TSP account, a government employee may be able to make an in-service distribution without penalty.

The BIDaWIZ Team



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