contribution-limits-2021

The benefit of the Traditional TSP plan is lets say you invested $10,000 per year and you are in the 20% tax bracket. If you don't invest you pay 20% taxes on $10,000 which will be $2000 in taxes. If you invest in the Traditional TSP plan, you will not pay taxes on the $10,000. It's like the IRS gives you back $2000 in taxes and your cost to match that $10,000 will be $8,000. You will be taxed when you start withdrawing.

For the Roth TSP plan you will invest $10,000 and pay $2000 in taxes. You will not pay taxes when you withdraw funds.