Resources

Forms:

U = Uniformed Services
  • TSP-41, Notification to TSP of Nonpay Status
  • TSP-3, Designation of Beneficiary
  • TSP-U-1, Election Form
Multiple TSP Accounts
If you have both civilian and uniformed services accounts, you may create a Web password and user ID that may be used for both of your accounts.

Saving money is not always easy, but the Federal Government offers two programs to make saving easier for military service members: the Thrift Savings Plan (TSP) and the Department of Defense’s (DoD) Savings Deposit Program (SDP). While these savings programs help you become financially ready, they are entirely different from one another. To avoid confusion, you should familiarize yourself with the differences.

For starters, the TSP is a long-term retirement savings plan that is open to all active service members. It’s a lot like a private sector 401(k) plan. You can elect to contribute 1% to 100% of your basic pay to the TSP as soon as you join the military. The TSP doesn’t replace your military retirement pension, which is available only if you serve for a minimum of 20 years. Rather, the TSP is an excellent opportunity for you to supplement your retirement income through long-term saving.

The SDP, on the other hand, is a short-term savings program that is only available to service members who are deployed in combat zones or other operations and are receiving Hostile Fire Pay/Imminent Danger Pay (HFP/IDP). You can only set up an SDP account after you’ve been deployed for 30 consecutive days or for at least one day in three consecutive months. You can build your financial savings by reaping the benefits of SDP’s high returns.

The chart below shows the additional differences between the TSP and the SDP. Use it to help you make the best decisions for your financial objectives.

Thrift Savings Plan (TSP)Savings Deposit Program (SDP)
  • Long-term retirement savings plan
  • Short-term savings program
  • Accepts tax-exempt, tax-deferred, and Roth contributions
  • Accepts deposits from unallotted current pay and allowances
  • With Roth TSP, earnings can be tax-free if certain conditions are met.*
  • You must pay taxes on SDP interest.
  • Variable returns based on investment choices and market performance
  • Guaranteed 10% annual return  compounded quarterly
  • Maximum interest-earning contribution—$10,000 per deployment
  • You can keep your TSP account through retirement.
  • You must withdraw your SDP when your tour of duty ends.
  • Contributions are made by payroll deduction only.
  • Deposits can be made by cash, personal check, money order, or payroll deduction.
*Roth earnings are tax-free when you reach age 59½ or have a permanent disability, and five years have passed since the year of your first Roth contribution.

 

Now that you’re clear on how both savings options work, you can make the best choices for your short- and long-term financial goals. To enroll in the TSP, log into myPay and select the “Traditional TSP and Roth TSP” option. If your service doesn’t use myPay, you can submit Form TSP-U-1, Election Form. To learn about the SDP, visit DFAS.mil.