The Thrift Savings Plan is neither a 401(k) nor a 403(b), but federal tax law treats it almost identically to a 401(k). So if you’re asking whether TSP is a 401(k) or a 403(b), the honest answer is that it’s a separate defined contribution plan built for federal workers, sharing the same contribution limits, tax treatment, and Roth-versus-Traditional structure as those private-sector plans, with a few meaningful differences in who can use it, how the match works, and what you can invest in.
Why the TSP Is Legally Its Own Plan
Each of these plans sits on a different piece of federal law. Private-sector 401(k) plans are authorized under Internal Revenue Code Section 401(k), and 403(b) plans under Section 403(b).1Office of the Law Revision Counsel. 26 U.S. Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans2Office of the Law Revision Counsel. 26 U.S. Code 403 – Taxation of Employee Annuities The TSP was created by the Federal Employees’ Retirement System Act of 1986 and lives under Title 5 of the U.S. Code.
Its tax treatment, though, comes through Section 7701(j) of the Internal Revenue Code, which directs the IRS to treat the Thrift Savings Fund as a qualified trust under Section 401(a).3Office of the Law Revision Counsel. 26 U.S. Code 7701 – Definitions – Section: Tax Treatment of Federal Thrift Savings Fund That’s the reason your TSP contributions and withdrawals follow the same basic tax rules as a 401(k), even though the plan itself was never created under Section 401(k).
Who Can Use Each Plan
You don’t choose among these plans. Your employer does.
The TSP is available to federal civilian employees under either the Federal Employees Retirement System or the older Civil Service Retirement System, plus members of the uniformed services on active duty or in the Ready Reserve.4The Thrift Savings Plan (TSP). How the TSP Fits Into Your Retirement
A 401(k) is the standard retirement plan offered by for-profit employers in the private sector. A 403(b) serves a narrower group: employees of public schools, colleges, universities, churches, and organizations tax-exempt under Section 501(c)(3), such as non-profit hospitals and charitable foundations.5Internal Revenue Service. IRC 403(b) Tax-Sheltered Annuity Plans The kind of employer you work for decides which plan you get.
Contribution Limits Are the Same
The IRS sets a single elective deferral limit that applies across the TSP, 401(k), and 403(b). For 2026, you can contribute up to $24,500 of your pay.6Internal Revenue Service. Retirement Topics – Contributions If you participate in more than one of these plans in the same year — say, you leave federal service mid-year and start a private-sector job — the $24,500 cap applies to your combined contributions.
Catch-up contributions work the same way across all three plans too. Workers 50 and older can add up to $8,000 in 2026, for a total of $32,500.7Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Under SECURE 2.0, participants aged 60, 61, 62, or 63 get a higher catch-up limit of $11,250, allowing up to $35,750 in total deferrals for 2026.8Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits
Traditional and Roth Both Available
Like 401(k) and 403(b) plans, the TSP offers two tax approaches.
Traditional TSP contributions come out of your paycheck before income taxes, lowering your taxable income now. Your money grows tax-deferred, and you pay ordinary income tax on every dollar you withdraw in retirement.9Thrift Savings Plan. Changes to Tax Rules About TSP Payments
Roth TSP contributions come from after-tax dollars, so there’s no upfront tax break. Qualified withdrawals — contributions and earnings — come out completely tax-free.9Thrift Savings Plan. Changes to Tax Rules About TSP Payments To qualify for tax-free treatment of earnings, at least five years must have passed since January 1 of the year you made your first Roth TSP contribution, and you must be at least 59½, permanently disabled, or deceased.10The Thrift Savings Plan (TSP). Roth In-Plan Conversions
One TSP-specific quirk: all agency matching and automatic contributions go into your Traditional balance. You can’t direct employer money into a Roth account.
Where the TSP Actually Differs
The Match Is Set by Statute
In a private 401(k) or 403(b), the employer writes the matching formula, and it varies from generous to nonexistent. The TSP match is written into federal law and is the same for every covered employee.
If you’re a FERS or Blended Retirement System participant, your agency automatically contributes 1% of your basic pay whether you contribute anything or not. Then the agency matches your first 3% dollar-for-dollar and the next 2% at 50 cents on the dollar. The maximum agency contribution is 5% of your basic pay, and to capture the full match you need to contribute at least 5% each pay period.11Office of the Law Revision Counsel. 5 U.S. Code 8432 – Contributions
CSRS employees can contribute to the TSP but receive no agency automatic or matching contributions.12Office of the Law Revision Counsel. 5 U.S. Code 8351 – Participation in the Thrift Savings Plan
Vesting rules also differ. Your own contributions and the agency matching contributions are yours immediately. The automatic 1% contribution vests after three years of federal service for most FERS employees, or two years for noncareer Senior Executive Service members and congressional staff.13Thrift Savings Plan (TSP). Thrift Savings Plan Vesting Requirements and the TSP Service Computation Date Leave before vesting and you forfeit the automatic 1% and its earnings.
Fewer Investment Choices, Much Lower Fees
Where a private 401(k) or 403(b) might list dozens or thousands of mutual funds, the TSP keeps it simple. Participants choose among five core index funds:14The Thrift Savings Plan (TSP). Individual Funds
- G Fund: short-term U.S. Treasury securities, the lowest-risk option.
- F Fund: a broad index of U.S. investment-grade bonds.
- C Fund: an index of large and mid-sized U.S. companies.
- S Fund: an index of smaller U.S. companies not included in the C Fund.
- I Fund: an index of companies in developed markets outside the United States.
The TSP also offers eleven Lifecycle (L) Funds, each holding a professionally designed mix of the five core funds and named for a target retirement date, from L Income (for people already withdrawing) through L 2075. Every quarter the allocation shifts toward more conservative investments as the target date approaches, and when an L Fund reaches its target date it merges into the L Income Fund.15The Thrift Savings Plan (TSP). Lifecycle Funds
Participants who want more choice can use the TSP’s mutual fund window, which offers thousands of additional mutual funds through an external brokerage. You need at least $40,000 in your TSP account, must transfer at least $10,000 as your initial investment, and can hold no more than 25% of your total TSP balance through the window at any time.16The Thrift Savings Plan (TSP). Mutual Fund Window
The window carries extra costs: $132 per year in combined administrative and maintenance fees, plus $28.75 each time you buy or sell a fund, plus each fund’s own expense ratio. Compare that to the core TSP funds, whose total expense ratios run from 0.034% to 0.051% per year — among the lowest of any retirement plan in the country.17The Thrift Savings Plan (TSP). Expenses and Fees16The Thrift Savings Plan (TSP). Mutual Fund Window Those low fees are the practical reason many federal employees keep money in the TSP even after leaving government.
Moving Money Between the Plans
Because the three plans share compatible tax treatment, you can generally move money among them when you change jobs. The TSP accepts direct rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, and eligible employer plans such as 401(k)s and 403(b)s into your Traditional TSP balance. It also accepts direct rollovers of Roth money from Roth 401(k), Roth 403(b), and Roth 457(b) accounts into your Roth TSP balance.18The Thrift Savings Plan (TSP). Move Money Into the TSP
Two limits worth knowing: the TSP does not accept rollovers from a Roth IRA, and it does not accept indirect rollovers of Roth money (where you take a check and redeposit it yourself).18The Thrift Savings Plan (TSP). Move Money Into the TSP When you leave federal service, you can keep the money in the TSP, roll it into a new employer’s 401(k) or 403(b), or move it to an IRA.