Comprehensive Retirement Strategies

As a TSP participant, you should know how to protect your account against various types of fraud. The TSP is administered by the Federal Retirement Thrift Investment Board, an independent federal government agency. Private parties offering assistance with your TSP account have not been approved, endorsed, sponsored, or authorized by the Federal Retirement Thrift Investment Board. If you are unsure whether correspondence or telephone calls claiming to be from the TSP are authentic, DO NOT provide any personal or financial information. Contact us directly at 1-877-968-3778 and choose option 3 to speak to a Participant Service Representative if you have questions or if you need to report any suspicious activity involving your TSP account.

Yes, you can leave your entire account balance in the TSP when you leave federal service if the balance is $200 or more. You can continue to enjoy tax-deferred earnings and low administrative expenses. Once you separate, you will no longer be able to make employee contributions. However, you can transfer money into your TSP account from IRAs (although not from Roth IRAs) and eligible employer plans. Your account will continue to accrue earnings, and you can continue to change the way your money is invested in the TSP investment funds by making inter-fund transfers.

Check with your agency or service payroll office about its procedures for making an election to start, change, or stop your TSP contributions. You may be instructed to use your agency's or service's electronic system (for example, Employee Express, myPay, EBIS, LiteBlue, or NFC). If your agency or service accepts the paper form, you can download and complete the TSP election form (Form TSP-1 or Form TSP-U-1 ) from this website, use the form they give you, or call the ThriftLine at 1-877-968-3778 and chose option 3 to have it sent to you. Contribution election each calendar year by completing and submitting a new Form TSP-1-C (or Form TSP-U-1-C for uniformed services).

If you would like your TSP account to be distributed according to the statutory order of precedence, it is not necessary to complete Form TSP-3, “Designation of Beneficiary.” If you do not want your TSP account distributed in the order of precedence, you can complete Form TSP-3, “Designation of Beneficiary.” You can download the form from this website or you can call the ThriftLine at 1-877-968-3778 and choose option 3 to request a copy of the form. Return the completed, original form directly to our address on the form or fax it to the number provided in the instructions. Do not submit Form TSP-3 to your agency or service. Be sure to make a copy of the form for your records. If you do not remember whether you have submitted a Form TSP-3, you can find out by calling the ThriftLine at 1-877-968-3778 and choosing option 3 to speak with a Participant Service Representative.

You can begin making “catch-up” contributions at any time beginning in the year you turn 50. Use Form TSP-1-C, “Catch-Up Contribution Election,” to start, stop, or change your catch-up contribution election to your TSP account. You must expect to contribute the maximum amount allowed of regular employee contributions for the year to the TSP or to an equivalent tax-deferred employer plan, such as a private sector 401(k) or nonprofit 403(b) employer plan. Your catch-up contributions will stop automatically when you reach the catch-up contribution limit or at the end of the calendar year, whichever comes first. You must make a new catch-up.

Disbursements are processed daily. Generally, you should allow several weeks from the time you submit your completed withdrawal request and the time that payment is sent. The TSP will notify you in writing when your payment has been disbursed. You can go to My Account under “Withdrawals” or call the ThriftLine at 1-877-968-3778 and choose option 3 to speak with a Participant Service Representative to find out the status of your request. Your withdrawal could take longer if your agency or service delays reporting your separation from federal service, if you have an outstanding TSP loan, if there is some type of hold on the account such as court order hold, if you are trying to do a transfer or other split withdrawal, or if you submit forms that are not completed properly.   Note that withdrawal processing times vary and can take less time than described above. If you want your withdrawal to take place in the next calendar year, wait until then to submit your form. You cannot submit a withdrawal form and specify some future time for the disbursement to take place.   After you leave federal service you will not have to take your money all at one time. You have two options for withdrawing your TSP account after you leave: you may take a partial withdrawal or a full withdrawal. Partial Withdrawal A partial withdrawal allows you to make a one-time-only withdrawal and leave the rest of your money in the TSP until a later date. Use Form TSP-77, “Request for Partial Withdrawal When Separated.” It is available on this website or through the ThriftLine. You can make a partial withdrawal under the following circumstances: You have not made a prior partial withdrawal or have one that is currently pending. You did not make an age-based in-service withdrawal while you were still employed by the federal government or the uniformed services. You request $1,000 or more from your account. Full Withdrawal You will be required to make a full withdrawal election to start withdrawing your money by April 1 of the year following the year you turn age 70 1/2. If you want to initiate monthly payments, purchase a life annuity, receive a lump sum payment, or a combination of these from your entire vested TSP account balance, use Form TSP-70, Request for Full Withdrawal, to declare what percentage of your account balance is to be used for each of the withdrawal options. You may partially fill in the withdrawal form online, but you cannot submit it online. You must print out the form and either mail or fax it to us for processing using the address or fax number on the form. (If you are a married FERS participant or member of the uniformed services, for example, your spouse must also sign the withdrawal form.) Full Withdrawal as a Series of Monthly Payments Choose monthly payments if you want to withdraw your entire account in a series of payments spread over time. We offer two choices of monthly payment. Specific Dollar Amount You may request a specific dollar amount that you will receive each month until your entire TSP account has been paid out to you. The amount you request must be $25 or more. Life Expectancy You may request to have us calculate your monthly payment for you using the Internal Revenue Service's (IRS) Life Expectancy Tables. Your first payment amount will be based on your age and your account balance at the time of the first payment. We will recalculate your monthly payment every year.   You will have an opportunity, at the end of each year, to make limited changes to the monthly payment amount you receive (see Form TSP-73, “Change in Monthly Payment Amount”). At any time, while receiving monthly payments, you can also request to withdraw the remaining balance in your TSP account using Form TSP-79, “Change From Monthly Payments to Final Payment.” Full Withdrawal as a Life Annuity* A life annuity is a monthly benefit paid to you for life. You can withdraw all or part of your TSP account as a life annuity as long as the amount used to purchase it is $3,500 or more. If you have both a traditional and a Roth balance, the $3,500 minimum threshold applies to each balance separately. The TSP will purchase your annuity(ies) for you from its provider. For information on the annuity options available to you, visit Annuities. *Make sure you do NOT confuse the TSP annuity that you can purchase as a full withdrawal option with the annuity that is part of your retirement package. The TSP annuity is not the basic annuity that you will receive when you retire as either a FERS or CSRS employee, or the retired pay that you receive as a member of the uniformed services. Full Withdrawal as a Single Payment Choose the single payment option if you want to withdraw your entire account at one time. It is sometimes referred to as a "lump sum" payment. Partial and Full Withdrawal If you want to take both a partial and a full withdrawal together, be sure to submit your Form TSP-77, “Request for Partial Withdrawal When Separated,” first and wait for confirmation of payment before you submit Form TSP-70. If you submit them at the same time, your full withdrawal may process first and your partial withdrawal will be rejected.   Be advised that while your withdrawal request is being processed, the money you have invested in any of the TSP funds is subject to fluctuation due to changes in market prices and interest rates. If you want to completely eliminate your exposure to risk of loss during this period, you can request an inter-fund transfer to invest your account in the Government Securities Investment (G) Fund. If you have questions regarding your withdrawal options, please call the ThriftLine at 1-877-968-3778 and choose option 3 to speak with a Participant Service Representative. Once your disbursement election has been processed, it cannot be cancelled or returned to us. You may want to discuss your withdrawal election decision with your accountant or financial advisor. If you are considering a TSP annuity, you should also use the Retirement Income Calculator on this website or ask a Participant Service Representative for assistance to estimate your monthly annuity amount.

While both the Thrift Savings Plan and Roth IRAs are excellent retirement-savings vehicles, they have different characteristics and benefits. Here is a side by side comparison.   Like a 401(k), the federal Thrift Savings Plan requires you to pay taxes on your contributions and earnings when they are withdrawn during retirement.   By contrast, a Roth IRA allows investors to withdraw their contributions and earnings in retirement tax-free, after they reach 59½ years of age, as long as the account has existed for five years. This is because Roth IRA investors do not get a tax break when they fund the account; their contributions are made with after-tax dollars. (There are income limitations for qualifying for a Roth, so make sure you qualify.) On the other hand, the Thrift Savings Plan (TSP) also offers an after-tax Roth option similar to a Roth 401(k). You pay taxes on your contributions as you make them, and your earnings are tax-free at withdrawal as long as you meet certain IRS requirements. It has the same contribution limits as the regular Thrift Savings Plan.   So the overall question is: Roth vs. non-Roth. When do you want to pay your taxes—when you invest (Roth) or when you withdraw your money (non-Roth)? In which stage of life are you likely to be in a higher tax bracket? Many investors are in a low-income tax bracket early in their careers, when they start saving (or should start saving!) for retirement. For those investors, the upfront reduction in taxable income they get with a regular TSP might not benefit them all that much. Also, if your money stays in the savings plan for years, it will be very beneficial to be able to withdraw all those earnings tax-free years down the road. But there is one more important question to ask before you decide: Do I qualify for matching funds? If you are a civilian employee and qualify, you should contribute at least up to the federal match first because you earn 100 percent on matched money. After that, it may make sense to contribute up to the limit to a Roth IRA, in order to gain its tax savings. (IRA contribution limits for 2017 are $5,500, plus an additional $1,000 catch-up contribution for the 50-plus group.) Even if you choose a Roth TSP instead of the regular form, you might still want to add a Roth IRA because Roth IRAs have one other benefit: no required minimum distributions (RMDs) at age 70 1/2. Say, you are a member of the Armed Forces and do not earn matching contributions for the amount you contribute. In that case, it could be more beneficial to invest in a Roth IRA first for its excellent tax benefits and freedom from RMDs later in life. Then, if you have additional money left to contribute, consider either a regular or Roth TSP contribution, depending on whether you want a tax deduction now or later. The tax savings of a Roth IRA make it an excellent choice for your retirement funds, especially the first portion of your disposable income, when compared with the federal governments Thrift Savings Plan. This is where we come in and help assist in your decision making and answer which plan is best for you and your family!   In short, there are several options. So take your taxes and your income—both current and projected—into consideration when deciding to which vehicle you will entrust your retirement savings.