As of May 15, 2024, the Federal Retirement Thrift Investment Board (FRTIB) has eliminated the 30-day restriction rule giving federal retirees more flexibility when taking withdrawals from their TSP. Previously, retirees were subject to a 30-day waiting period between withdrawals. Now you have the ability to complete unlimited TSP withdrawal requests entirely online in My Account. Your options include:
- Fixed installment payments
- Partial lump-sum withdrawals
- TSP transfers or rollovers
- Using TSP funds to purchase a lifetime annuity
TSP Fixed Installment Payments & Partial Withdrawals
You can choose to take automatic monthly, quarterly or annual installment payments at a fixed dollar amount as long as it’s at least $25. You also have the option to have fixed installments withdrawn from your Traditional balance first or from your Roth balance first. Either way, your payments will continue until your total account balance equals zero. If you’re worried about outliving your TSP, your installments can be based on the IRS Life Expectancy tables. You’re also allowed to take unlimited partial, lump-sum distributions of at least $1,000 even if you’re currently receiving installment payments.
Understanding TSP Transfers & Rollovers
You can move funds from your TSP account into a qualified trust or an eligible retirement plan. An eligible plan can be either an IRA or an eligible employer plan like a 401(k). With a transfer, funds go directly into the trust, IRA or the employer plan you selected. With a rollover, the money is sent directly to you and you have 60 days to deposit the funds into an eligible account. If not, the funds will be considered a TSP withdrawal and will be taxed accordingly as income.
“You can use your TSP balance to purchase the MetLife Annuity — the exclusive annuity provider for the TSP.”
Purchase A Lifetime Annuity
A Lifetime Annuity is an insurance product establishing a contract between you and an insurance company that provides you with guaranteed income for life. As with other types of insurance, you’ll pay a premium. You can use your TSP balance to purchase the MetLife Annuity — the exclusive annuity provider for the TSP. Or, you can purchase an annuity from a private-sector insurer offering other annuity options that can be customized with a long-term care rider plus other advantages.
Required Minimum Distributions (RMDs)
Under the SECURE Act 2.0 (effective January 1, 2023), the age for RMDs has been raised to 73 for those born after December 31, 1950. Also note that as of January 1, 2024, Roth TSP balances are no longer subject to RMDs.
For more information about managing your TSP distributions, connect with an FRC® trained advisor.
https://www.tsp.gov/plan-news/2024-05-15-No-30-day-waiting-period-between-withdrawal-requests
