We hope you enjoy reading this blog post.
If you want My Federal Plan to assist you with your retirement planning, click here.

The Different Advantages of a TSP over an IRA

The Thrift Savings Plan (TSP) is a contribution plan for U.S. civil service employees, retirees, and uniformed services members. They are put in place so that our country’s brave men and women would have a reliable source of financials once they have decided to hang up their uniforms someday. 

It has been designed with features and benefits that make it one of the most enticing and trusted forms of plan amongst the others, but another financial plan seems to be contending for its place.

An Individual Retirement Account refers to the individual retirement plans provided by different financial institutions in the U.S. One of its main features is that it allows for tax advantages for all retirement savings.

Now, while both TSP and IRA may have their similarities and differences in one way or the other, the fact remains that TSP is more advantageous to have than the IRA. You may wonder why that may be the case. 

Well, no need to look far, as we have listed a couple of their differences that may indicate how beneficial a TSP is. Take note of them if ever you are a civil service employee looking to invest in that particular plan.

The TSP Offers a Variety of Investment Options

If you want to know how diverse a TSP is, look no further than the many options that it provides. If you’re going to do something else after you’ve retired from the service, then this financial choice is for you. 

TSPs are known to provide a bond fund, a government securities fund, and an international fund. On the other hand, an IRA does not even offer investment options, opting for their beneficiaries to hire a professional to do it for them.

The TSP Only Has a Few Expenses Compared to an IRA

As with all types of investments and financial benefits, the providing agency or industry will always have a slice of the pie. However, the good news about TSPs is that they have way fewer expenses and deductions than an IRA. 

Since the TSP comprises many civil service contributors, the amount from their deductions is already well accounted for and generously covered. On the other hand, an IRA would ask for many fees just to hold and process your invested amount, making your payments a lot harder and higher every month.

The TSP Has More Financial Protection than an IRA

The TSP’s process usually involves protecting your investments from external industries and agencies who may try to lure you in on unsafe investments and scams. You may even encounter people who will offer to double your money through precious metal investments and insurances. Those are very risky ventures that must be avoided at all costs.

An IRA does not even bother to protect you from this, under the guise of giving you the freedom to choose for yourself. It may seem to empower you to make your own financial decisions, but not everyone is aware of these investment scams, and once you realize that they are not legitimate, it may already be too late to ask for your money back.


The advantages of TSPs over IRAs cannot be overlooked, especially since they have a significant effect on your hard-earned money. 

Do not be fooled by the simplicity of IRAs; they are often put in place to try to convince people to turn over their money to that side of the fence, not knowing the low returns, unsafe insurances, and high deductions that go along with them. Trust in TSPs instead and have a reliable source of cash even after you have retired from the service.

If you are looking for a company that offers a well-trusted Thrift Savings Plan, look no further than My Federal Plan. We specialize in various benefits, including those that involve retirement, social security, insurance, and of course, TSPs. Contact us today—let us discuss all your financial options.

Subscribe to updates

Share this article!


Do you need help with retirement planning?

federal employee retirement guide


Don't forget to download your free copy of our Retirement Guide for Federal Employees

Did you schedule your consultation?

If you are a federal government employee or postal worker we can connect you with a licensed financial professional with the experience needed to help you understand your pension benefits and overall retirement plan.