Can You Participate In The TSP After Retirement?

The TSP After Retirement

Your Thrift Savings Plan (TSP) is funded via payroll deductions.  Therefore, once you are no longer an employee your participation in the TSP stops as far as being able to make contributions.  However, you don’t have to take your money out of the TSP, you just cannot put money into it.

TSP After Leaving Federal Employment – TSP Withdrawals

If you leave service and decide to make a TSP withdrawal, you may do so in two ways.  You may make a partial TSP withdrawal or a full-withdrawal.   You can make a partial withdrawal of $1,000 or more.  You can make a request for a partial withdrawal online or use Form TSP-77.  If you make a full withdrawal you can request a single payment withdrawal of your entire TSP balance.  You may also request a series of monthly payments.  In this way you can choose a specific dollar amount to receive each month or you can receive a monthly amount based on your age and your account balance.  If you are requesting a specific dollar amounts, the monthly payment must be a minimum of $25.00.

TSP-77 Form

TSP Annuity

You may also elect a TSP life annuity.  The TSP life annuity pays you a monthly benefit for life.  The TSP will purchase an annuity for you from their provider (Currently Metropolitan Life Insurance Company – MetLife).  Make sure that you read up on the pros and cons of purchasing a TSP annuity directly through the TSP (We at PSRetirement.com suggest to strongly consider NOT taking this option).  You may also mix up your withdrawals.  You may use the methods outlined in the TSP Full Withdrawal option in a number of combinations – single payment, TSP monthly payments or the life annuity.  You can combine two options or all three, which ever fits into the plans you have made for you and your family and always make sure to speak with a trust Financial Professional before making any decisions.

Read over your TSP account(s) and make sure you understand how your TSP works in retirement and how to maximize your federal retirement benefits.  If you have put a retirement action plan in place, then you want to gain as much information as possible to help you live in retirement on your own terms.  FERS employees have to be especially cautious, yet assertive, by fully funding their TSP whenever possible because the TSP is the larget monetary component of the FERS retirement system.

How you manage your financial affairs is an individual matter.  However, just like any good work, it takes time to examine and analyze to choose the best options that fit your situation.  No two situations are alike, so don’t take a position because it sounds good.  Use your planning tools and take a position because it works for you.

P. S. Always Remember to Share What You Know.

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