TSP Considerations
& Withdrawal Options.
The Thrift Savings Plan is one of the lowest-cost retirement accounts in the country — and one of the most flexible at separation. Understanding your withdrawal options, RMD requirements, the G Fund advantage, and the stay-or-go decision is essential before you retire.
Why many retirees
stay in the TSP.
The decision to keep your TSP or roll it into a private IRA is one of the most consequential financial decisions at retirement. The TSP has advantages that most private plans can't match — but private accounts offer flexibility the TSP doesn't. Know what you'd be giving up before you move.
Many federal retirees opt to keep their TSP account because of the fund's attractive earnings history and extremely low administrative fees. TSP fees are often half or less of what most private-sector funds charge. The G Fund offers something nearly unique in investing: competitive yields with no market risk whatsoever.
The G Fund has no market risk. Unlike most private-sector funds, you don't have to worry about price fluctuations — and its 10-year compounded historical yield is 4.92%.
For retirees considering moving their TSP to Fidelity, Vanguard, or another provider: those platforms do offer access to more diverse investments — any mutual fund, ETF, stock, or bond. But before you move, read the TSP Advantage article carefully. The costs and risks of leaving may outweigh the investment flexibility you'd gain. The TSP also now offers a Mutual Fund Window with access to over 5,000 mutual funds, significantly expanding in-plan investment options.
TSP for CSRS Employees
Civil Service Retirement System
TSP for FERS Employees
Federal Employees Retirement System
How to access your
TSP savings.
The TSP provides several ways to withdraw your savings. Withdrawal options were significantly expanded in September 2019, giving participants more flexibility than ever before. You can leave your account active and invested as long as you don't need the cash — with RMDs beginning at age 73.
Partial withdrawal
A single payment of any amount from your account while keeping the remainder invested. Can be made multiple times after the 2019 rule changes.
Single (full) payment
A lump sum of your entire account balance, paid to you directly or transferred to an IRA or eligible employer plan.
Monthly/quarterly/annual installments
A series of regular payments over time. You can start, stop, or change installment payments at any time — a 2019 improvement over the old rules.
Life annuity
The TSP purchases a life annuity from its annuity vendor on your behalf. Provides guaranteed monthly income for life. Irrevocable once selected.
Mixed withdrawal
Any combination of the above methods is called a mixed withdrawal — for example, a partial lump sum plus monthly installments for the remainder.
Transfer / rollover
All or part of a single payment (or monthly payments in some cases) can be transferred to a traditional IRA, Roth IRA, or eligible employer plan via TSP Transfer Form.
Electronic funds transfer available
Payments to you can be deposited directly into your checking or savings account via electronic funds transfer (EFT). For rollovers and transfers, complete the TSP Transfer Form to direct funds to your receiving institution.
2019 withdrawal flexibility improvements
Withdrawal rules changed significantly in September 2019. If you learned about TSP withdrawals before then, the old restrictions no longer apply.
Age-based in-service withdrawals (age 59½+)
If you are still working for the federal government and are age 59½ or older, you can request a withdrawal of $1,000 or more from your TSP account without leaving federal service.
Key rules for age-based in-service withdrawals
You must be age 59½ or older and currently employed. Multiple age-based in-service withdrawals are permitted under the 2019 rules.
Transfer restriction: In-service age-based withdrawals can only be transferred to a single traditional IRA, eligible employer plan, or Roth IRA — not to multiple accounts. To split funds across multiple accounts, transfer to one account first, then have that institution distribute to your other accounts. Confirm in advance that the receiving institution will allow additional transfers.
Transferring IRA & Roth accounts INTO the TSP
You can move tax-deferred money from an eligible retirement plan into your TSP — useful if you want to consolidate accounts and take advantage of the TSP's low fees.
Requirements for rolling money into the TSP
You must have an open TSP account with an existing balance when your request is received. Money cannot be transferred or rolled over into a beneficiary participant account.
Use the Request for a Roth Transfer Into the TSP form for Roth transfers. For questions about the process, call the TSP Help line at 1-877-968-3778.
RMDs — the 401(a) distinction
Required Minimum Distributions begin at age 73 — or at separation if you are already over 73 when you leave federal service. The TSP has important differences from IRAs and 401(k) plans when it comes to RMDs.
The TSP is a 401(a) plan — not a 401(k) or IRA
The TSP is governed under Internal Revenue Code § 401(a). Rules for satisfying RMDs from IRAs and 401(k) plans do not apply to the TSP. Under IRC, RMD requirements apply to 401(a) plans with no exceptions — including Roth money in your TSP account.
This is a critical distinction: Even if you have Roth money in your TSP, it is subject to RMDs — unlike Roth IRA money, which is not subject to RMDs during the owner's lifetime. If you want to avoid RMDs on your Roth money, rolling it out of the TSP into a Roth IRA before RMD age may be worth considering.
Leaving your account active in retirement
If you don't need the funds immediately, you can leave your TSP account invested. You are not required to begin withdrawals until your RMD start date (April 1 of the year following the year you turn 73, or following your separation date if already over 73).
The TSP continues to invest and grow in your chosen funds during this period. Many retirees find the G Fund particularly attractive as a low-risk allocation for the portion of their savings they will need in the near term.
TSP strategy
& further reading.
TSP.gov official resources, the stay-or-go analysis, RMD guidance, and survivor withdrawal options.