There are many benefits of a thrift savings plan (TSP), including building financial stability and retirement wealth, making wise investment choices, and reducing riskiness. Thrift Savings Plan contributions can grow tax-deferred over time, which makes them a great option for people who want to save for the long term. In addition, funds withdrawn from a TSP when you retire may be taxed at a lower rate than if you had earned the money through regular income. TSPs are also low-cost investments with generally high returns.