Whether choosing a path that leads to employment or starting a business, there are options to save for retirement after military TSP is no longer available.
Article: 5 minutes
Updated: October 7, 2026 Published: December 12, 2022
By: USAA Reviewed by: Editorial contributors
Transitioning from military to civilian life brings many financial decisions, including how to continue saving for retirement when you no longer contribute to the Thrift Savings Plan (TSP). While leaving the military may change your retirement savings options, it doesn’t mean your progress has to stop. Whether you pursue civilian employment, federal service or entrepreneurship, there are a variety of retirement accounts and employer-sponsored plans available to help you continue building long-term financial security. Understanding these options, and how they fit into your overall retirement strategy, can help ensure you stay on track toward your retirement goals.
When servicemembers transition from military to civilian careers, they have a lot to juggle. Where will they settle down? What are their skills, and how do those skills translate to a new career?
Through it all, one priority should remain top of mind: saving for retirement. You've likely taken advantage of the Thrift Savings Plan (TSP). But when contributing to your TSP is no longer an option, how can you continue to save for your retirement goals?
Read on for a roundup of the more common options for saving for retirement.
As you leave military service behind, a common question is what to do with your TSP. As you decide how to continue saving for retirement, you also need to decide what to do with the TSP funds you’ve amassed thus far.
The good news is that you really don’t have to do anything and you can keep your funds in TSP. In many cases, that’s probably the best option. But each person’s situation is different so it’s helpful to understand these 5 considerations before moving your TSP.
Video Duration: 3 minutes 0 seconds
How to save for retirement after TSP.
Saving for retirement continues to be a top priority as you transition from military to civilian life. But when contributing to the Thrift Savings Plan is no longer available, what options are out there? Let’s review a few of the more common saving vehicles. One option is an employer retirement plan, like a 401(k) or 403(b). These plans become an even bigger benefit when employers offer a matching contribution. For example, if the employer offers a 1-to-1 match on up to 5% of income, and the employee contributes 5% of their pay into the retirement plan, they get 5% for free from the employer’s matching contribution.
Even without access to an employer retirement plan, an Individual Retirement Account, or IRA, might be an option if meeting the eligibility requirements.
An IRA comes in two basic flavors: a Roth IRA or a traditional IRA. The main difference comes down to taxes.
If eligible, a traditional IRA provides an up-front tax deduction. Contributions and growth then are taxed when withdrawn. A Roth IRA is the opposite. There is no up-front tax deduction, but withdrawals are tax-free if meeting the account requirements. Find more information in IRS Publication 590-A.
Even a stay-at-home spouse who doesn’t have earned income can contribute to their IRA through what’s known as a spousal IRA. The nonworking spouse can contribute to their IRA out of the earned income from the wage-earning spouse. Keep in mind that the amounts contributed to both the worker IRA and the spousal IRA can’t exceed earned income.
Since many veterans are self-employed or business owners, what are some ways they can save for retirement?
Here are a few plans that might be available:
Also, don’t forget self-employed individuals still have access to IRAs if they meet the requirements. For more information on retirement plans for small business, check out IRS Publication 560.
As you can see, there are plenty of options to save for retirement even after leaving the military. Saving for retirement is probably the largest savings goal you have, so make it a priority, do your research and choose the best option for you.
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This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.
Prior to requesting an IRA rollover from a qualified retirement plan (Plan) account or Thrift Savings Plan (TSP) account, consider whether such a rollover is appropriate for you. A TSP is a retirement plan for military or civilian employees of the U.S. government. Although IRA rollovers may have certain advantages, Plan/TSP accounts have advantages you should consider before proceeding which may include, but are not limited to, low administrative and investment expenses and, if you separate from service at age 55 or older, you have penalty-free access to your Plan/TSP account funds. Additionally, you may want to consider maintaining at least a minimal Plan/TSP account balance because, in the event you want to transfer or rollover qualified assets to your Plan/TSP account in the future, to the extent it is allowed by your Plan/ TSP, you may be required to have an open Plan/TSP account with a balance when your request is received by that Plan/TSP. You should consult your tax advisor regarding your specific situation to determine whether a Plan/TSP account rollover to an IRA would be suitable for you.
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Let’s look at several options that might be available to you as you continue to save for retirement, an important goal for almost every person.
Many organizations offer employer-sponsored retirement plans, such as 401(k)s and 403(b)s, as a benefit to help provide their workers with income in retirement.
These plans are an even bigger benefit if the employer offers a matching contribution. For example, if a company offers a 1-to-1 match on up to 5% of income and you contribute 5% of your pay into the retirement plan, you'll get another 5% free from the employer's matching contribution. It’s essentially "free money" that you can add to your retirement fund.
Even without access to an employer retirement plan, one option is an Individual Retirement Account, or IRA. An IRA is a retirement vehicle that allows money to grow tax deferred. An IRA comes in two basic flavors: Roth or traditional. The main difference comes down to taxes and IRS eligibility requirements.
If eligible, a traditional IRA provides an up-front tax deduction. Contributions and growth are then taxed when you withdraw money during retirement. A Roth IRA is the opposite. There is no up-front tax deduction, but withdrawals are tax-free if meeting certain requirements. Even a stay-at-home spouse who doesn't have earned income can contribute to their IRA through a spousal IRA. The nonworking spouse can contribute out of the earned income from the wage-earning spouse. Keep in mind that the amounts contributed to the worker IRA and the spousal IRA can't exceed earned income. Read more in our Roth versus traditional IRA quick guide.
Since many veterans are self-employed or business owners, what are some ways they can save for retirement?
While the following list is not exhaustive, these are some of the more popular retirement saving plans for small businesses:
Remember that self-employed individuals still have access to IRAs if they meet the requirements.
Many military members continue their service to their country by becoming federal employees. The good news is that the TSP is still available to some federal employees Opens in a new window. The TSP website shows they're eligible to participate if they are a:
TSP benefits can vary between the different retirement systems, so take some time to understand the differences.
Here's an example of one difference: Those under the FERS retirement plan are eligible to receive an automatic contribution of 1% and up to 4% of additional matching contributions, similar to the Blended Retirement System, or BRS. However, the vesting periods can be different. Under FERS, the vesting period is either two or three years, depending on the job. BRS only has a two-year vesting period.
If someone has a military TSP and then joins the federal government, the account number stays the same. The sections are just divided into military and civilian sides. Once they separate from military service, they can combine the two through a TSP-65 form. This is common for Reserve members who are also civilian federal employees.
As you can see, there are plenty of options to save for retirement when you transition from a military career to a civilian one. During this stage of your life, an important piece of advice is to make saving a priority, research your options and choose the best ones for you.
Find out what steps you can take today to help you better prepare for tomorrow.