The TSP was created to give federal workers the opportunity to invest in a tax-advantaged account for retirement, similar to a 401(k) plan. ... Just like a 401(k), TSP contributions can be taken straight out of your paycheck, and you can invest that money in a variety of different funds.

Why is TSP so great?

It's tax deferred and affordable. Like with IRAs, federal income taxes on earnings in your TSP are deferred until they are withdrawn. Plus, TSP expenses are low compared to civilian employer-provided plans and other mutual funds inside or outside IRAs. All of this means more of your money goes to work for you.

Is the TSP I fund a good investment?

Investment in the I Fund offers the opportunity to experience gains from equity ownership of non-U.S. companies. Because it represents the stocks of companies in many developed countries (excluding the U.S.), it is an excellent way to diversify the stock portion of your TSP allocation.