Withdrawing from

Your TSP Account

for Separated and Beneficiary Participants
Installment Payments ◆ Single Withdrawals ◆ Life Annuities
 Contact Information

TSP Website: tsp.gov

ThriftLine: 1-877-968-3778
(For calls outside the U.S., Canada, and
most U.S. territories, use 404-233-4400.)

TSP Mailing Address: Thrift Savings Plan

P.O. Box 385021
Birmingham, AL 35238

Text Telephone (TDD): 1-877-847-4385

TSP Fax: 1-866-817-5023

 Table of Contents

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Questions to Ask Before Withdrawing from Your Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Tailoring Your Withdrawal Decisions to Your Personal Needs. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Leaving Your Money in the TSP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Your Withdrawal Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Withdrawal Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Traditional, Roth, or Both. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Taxes on TSP Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Transferring Your Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Withdrawal Rules for Rehired Participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Requesting Your Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Timing of Your Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Changing Your Withdrawal Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Special Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Vesting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Spouses’ Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Account Holds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Death Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Required Minimum Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Participants with Two TSP Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Reporting Changes in Personal Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Glossary of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

TSP Materials for Separated

and Beneficiary Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

i
Introduction have a significantly diminishing effect on the purchasing
power of your retirement savings. The following chart
shows how your account may be affected by seemingly
This booklet describes the choices that are available to modest inflation. Suppose that the value of your
all separated participants and beneficiary participants. In account thirty years from now is $150,000. An inflation
this booklet, a “separated participant” means someone rate of 2% per year would reduce that $150,000 to the
who established a Thrift Savings Plan (TSP) account purchasing power of only $82,811 today. Notice that the
while serving as a civilian federal employee or member higher the average rate of inflation, the less purchasing
of the uniformed services and has now separated from power you’ll have.
that employment. A “beneficiary participant” is a spouse
beneficiary of a deceased civilian or uniformed services Decline in Purchasing Power over 30 Years
TSP participant who has a TSP account established
in his or her name. In this booklet, you will find $150,000
information about the withdrawal process, the rules that
govern withdrawals, and the tax implications of each $120,000
withdrawal option.
$90,000
Before you decide to withdraw money from your TSP $82,811
2.0% 2.5% 3.0%
account, we recommend that you consider how your $71,511
$60,000 $61,798
decision may impact your future needs. For example, 1 5 10 15 20 25 30
if you are not ready to retire and are considering Years
using the money in your TSP account for purposes
other than your future retirement needs, you should It’s important to estimate the amount of money you
consider the tax implications and whether you will have need to put aside for retirement to maintain your
enough retirement savings when you are ready to retire. preretirement standard of living. Financial advisors
Alternatively, if you are retiring or retired, you should typically refer to this calculation as a retirement
think about when you will actually need the money in income replacement ratio, or the percentage of your
your TSP account and whether the withdrawal choices preretirement income that you need in retirement.
you make will provide enough income throughout your Experts will often recommend a range of numbers, but
retirement years. each person’s situation is unique. You also want to be
careful that you do not withdraw too much money
from your retirement account each year. Many retirees
Questions to Ask Before do, and they risk spending their savings too quickly.
Withdrawing from Your Account To avoid running out of money in retirement, planners
often recommend withdrawing no more than 4% of your
Given that you may need your retirement savings into retirement savings during your first year of retirement
your 90s, here are some questions you should ask and adjusting that amount annually for inflation.
yourself before deciding to withdraw your TSP account.

• When should I begin withdrawing my money? Tailoring Your Withdrawal

• How much do I think things will really cost during
my retirement?
Decisions to Your Personal Needs

• Will I have enough income to cover my expenses

after I retire?
There are other factors besides life expectancy that
you should take into consideration when making your
withdrawal decisions. For example:

• Will my retirement savings last for my whole life?

• What additional sources of income will you have

• Do I need to provide income for my dependents/ outside of your TSP account?

heirs?
• Will you be paying off a mortgage during your
retirement?

•
Because of inflation, the goods and services you buy
today will probably cost you more in the future. Once Will you be moving to an area where your expenses
you are living on a fixed income, increases in the cost of will be significantly higher or lower than where you
living can make meeting even the most basic expenses lived before you retired?
challenging. Even a relatively low rate of inflation can

1
 Everyone’s withdrawal choices will be TSP Installment Payments
based on different circumstances. The
important thing is to make sure your You can choose to receive payments from your account
decisions are well informed and carefully monthly, quarterly (every three months), or annually.
thought through. The TSP has online Your payments will continue, unless you stop them,
calculators available at tsp.gov to help you. until your total account balance equals zero. This is true
even if you choose to have the payments come from
your traditional balance first or from your Roth balance
Leaving Your Money in the TSP first. When you run out of money in your chosen source
(traditional or Roth), payments will continue from the
Unless you’re subject to required minimum distributions1 source you didn’t choose. See “Traditional, Roth, or
or you have a balance of less than $200,2 there’s no Both” on page 4.
requirement for you to make withdrawals from your There are two ways of setting the payment amount:
account. So you can leave your entire account balance payments of a fixed dollar amount and payments based
in the TSP and continue to enjoy tax-deferred earnings on life expectancy.
and our low administrative expenses. You won’t be able
to make employee contributions, but your account
will continue to accrue earnings, and you can continue Fixed Dollar Amount
to change the way your money is invested in the TSP
investment funds by making interfund transfers. You can choose the amount you want to receive in each
payment as long as it’s at least $25.
If you’re a separated participant, you can also
transfer money into your TSP account from
traditional and Roth eligible employer plans and from Life Expectancy
traditional IRAs. (Transfers from Roth IRAs are not You can have us compute your installment payments
allowed. Beneficiary participants are not allowed to based on IRS life expectancy tables. Your initial
transfer money in.) payment amount will be based on your age and your
account balance at the time of the first payment. Life
expectancy payments are calculated using your entire
account balance even if you choose to withdraw from
Your Withdrawal Options your Roth balance first or your traditional balance first.
(See “Traditional, Roth, or Both” on page 4.) If you
choose life-expectancy-based installment payments
Withdrawal Methods in combination with a single withdrawal, an annuity
There are three basic methods of withdrawing money purchase, or both, your payment calculation will be
from your TSP account as a separated or beneficiary made after the other funds are removed from your
participant: installment payments, single withdrawals, account. Each January, we will recalculate the amount
and annuity purchases. Choosing one or more of these of your installment payment. The recalculation will be
methods is not the only decision you’ll need to make based on your age and your account balance at the end
when making a withdrawal, so be sure to read on after of the preceding year.
this section.
Use the “TSP Installment Payment Calculator” at
1 See page 8 for information about required minimum
tsp.gov to estimate the amount of your life expectancy
distributions. payments or to see how long payments of a fixed dollar
2 Separated participants, if your vested account balance is less amount would last. Remember that investment gains
than $200 after your agency or service reports that you have left or losses and other account activity could cause your
service, your balance will be automatically paid directly to you account balance to increase or decrease, which could
in a single payment (i.e., cashout). You will not be allowed to
remain in the TSP. We will not withhold any amount for federal increase or decrease either the amount of your life-
income tax on your cashout if all your withdrawals from the TSP expectancy payments or the duration of your fixed-
throughout the year of your cashout add up to less than $200. dollar-amount payments.
If your balance is less than $5.00 when you leave service, we will
automatically forfeit the balance to the Thrift Savings Plan. Your
quarterly participant statement will indicate that the balance has
been forfeited. You can reclaim the forfeited amount by sending
us a written request, but we will not credit earnings to the
account after the forfeiture date.

2
Making Changes to
Your Installment Payments
• You are permitted to transfer all or part of your
payments to an IRA or eligible employer plan.

After your installment payments are set up, you can If the expected duration of your payments is 10 years
make changes to them at any time. See page 7 for or more or they are based on life expectancy,3 the
information on how to make changes. following IRS rules apply:

You can make the following changes whether you’re

receiving payments of a fixed dollar amount or based on
• We must withhold for federal income tax as if you
are married with three dependents.
life expectancy:
• You can instruct us to waive withholding, withhold

• stop payments based on your marital status and allowances, or

•
withhold an additional amount.
change the source of payments (traditional, Roth,
or both) • You are not permitted to transfer any part of your

•
payments to an IRA or eligible employer plan.
start, stop, or change direct deposit of your
payments See the TSP tax notice Important Information About

• change your federal tax withholding Payments From Your TSP Account for more information.

To determine the expected duration of your fixed-dollar-

The following changes can only be made if your
amount payments, we divide your account balance by
payments are of a fixed dollar amount:
the amount of your payment:
• change the dollar amount of your payments For annual payments:

• change the frequency of your payments Balance ÷ Payment Amount

• start transferring your payments to an IRA or

eligible employer plan (only if payments are
For quarterly payments:
(Balance ÷ Payment Amount) ÷ 4
expected to last less than 10 years) For monthly payments:

• change or stop transfers (if currently transferring)

(Balance ÷ Payment Amount) ÷ 12

We do not consider potential earnings or losses when

Important: Note that changing the amount or calculating the expected duration of your payments.
frequency of your payments is not valid for payments
based on life expectancy. So we will change your The following events will trigger a recalculation of
payments to fixed-dollar-amount payments if you your expected payment duration:
request such a change.
• You change the dollar amount or frequency of your
payments.
Installment Payments Lasting Less Than 10
• You transfer money into your TSP account.
Years vs. Payments Lasting 10 Years or More
The rules for federal tax withholding and eligibility to
• You take a withdrawal or purchase an annuity in
addition to your installment payments.
transfer to an IRA or eligible employer plan are different
depending on how long your payments are expected to If the recalculation changes the expected payment
last. duration from less than 10 years to 10 years or more,
or vice versa, the rules that apply to your payments will
If the expected duration of your payments is less change.
than 10 years, the following IRS rules apply:

• We must withhold 20% of any amount that you do

not transfer for federal income tax.

• You can instruct us to withhold an amount in

addition to the 20% default withholding.

• We cannot waive withholding or withhold any less

than 20%.
3 Payments based on life expectancy are treated the same as
fixed-dollar-amount payments lasting 10 years or more,
regardless of your age.

3
Single Withdrawal method that you choose. For detailed information
about the tax rules, read the TSP tax notice Important
You can withdraw any amount of $1,000 or more from Tax Information About Payments From Your TSP Account,
your account in a single payment. There is no limit on available at tsp.gov or by calling the ThriftLine.
the number of single withdrawals you can make, but we
will not process more than one in any 30-day period. You
are allowed to take a single withdrawal of part of your Special Note for Uniformed
account even if you’re currently receiving installment Services Members
payments.
If you have a uniformed services TSP account, or a
beneficiary participant account created from your
Purchase an Annuity spouse’s uniformed services account, your account
may include tax-exempt contributions as a result of
You can use all or part of your TSP account to purchase deployment to a combat zone. These contributions
a life annuity through our outside vendor. Purchasing are always exempt from federal income taxes. The tax
an annuity means that you pay now to receive monthly treatment of earnings on tax-exempt money depends
payments that last for the rest of your life (or, if you on whether they’re in a traditional balance or a Roth
choose a joint life annuity, the life of your joint balance. Earnings on tax-exempt money in your
annuitant). The money you use to purchase a life traditional balance will be subject to tax at the time that
annuity is no longer managed by you; it’s not like your you make a withdrawal. The earnings on tax-exempt
TSP account, an IRA, a CD, or a bank account. You give money in your Roth balance will not be taxed if they
up your money and the control of it in exchange for are qualified.4 See the TSP tax notice Important Tax
guaranteed lifetime monthly payments. If you choose Information About Payments From Your TSP Account for a
this option, we will purchase an annuity for you from detailed explanation.
our annuity provider. Your annuity is not part of your
TSP account. The minimum for an annuity purchase is Note: Withdrawals from a uniformed services
$3,500. The minimum applies to your traditional and account traditional balance will be paid pro rata (i.e.,
your Roth balances separately. See the TSP fact sheet proportionally) from taxable and nontaxable amounts.
Annuities, available at tsp.gov, for more information.

Transferring Your Withdrawal

Traditional, Roth, or Both You can transfer part or all of your single withdrawal or
eligible installment payments to an IRA or an eligible
If you have both traditional and Roth money in your employer plan (for example, the 401(k) plan of a new
account, you can specify that your withdrawal should employer). Check with the IRA provider or the other
come only from your traditional money or only from plan’s administrator to see if it can accept your transfer.
your Roth money. This is optional. If you don’t specify, Any tax-deferred amounts that are transferred will retain
then your withdrawal will be made from both types “pro their tax-deferred status until you withdraw your money.
rata,” meaning it will have the same percentages of Roth
and traditional as are in your account. Note: You can transfer traditional money to a Roth IRA,
but you will have to pay taxes on the amount transferred
Example of a pro rata withdrawal: Your total at the time you transfer it. You cannot transfer Roth
account balance is $150,000, of which $120,000 (80%) money to a traditional IRA since that would result in
is traditional and $30,000 (20%) is Roth. You request a your paying taxes on the same money twice, once before it
withdrawal of $10,000, and you don’t specify traditional went into your Roth TSP and once when you withdraw it
or Roth. Your withdrawal will consist of $8,000 (80%) of from the traditional IRA.
traditional money and $2,000 (20%) of Roth money.

4 Roth earnings become qualified (i.e., paid tax-free) when the

Taxes on TSP Withdrawals following two conditions have been met: (1) 5 years have passed
since January 1 of the calendar year in which you made your first
Your TSP withdrawal may be subject to federal income Roth contribution and (2) You have reached age 59½ or have
taxes. The tax treatment of your withdrawal depends a permanent disability or in the case of your death. Note: We
cannot certify to the IRS that you meet the Internal Revenue
on the type of balance (traditional, Roth, or both) from Code’s definition of a disability when your taxes are reported.
which your withdrawal is taken as well as the withdrawal Therefore, you must provide the justification to the IRS when you
file your taxes.

4
Single withdrawal. If you have only one type of balance Transferring tax-exempt TSP balances. Tax-exempt
(traditional or Roth) in your single withdrawal, you can balances resulting from contributions from pay earned
direct all or part of it to only one IRA account or eligible in a combat zone may also be transferred or rolled over
employer plan. If you have both traditional and Roth into an IRA or transferred to an eligible employer plan.
balances in your withdrawal, you can direct all or part Traditional IRAs must certify that they accept tax-
of the traditional portion to one IRA or plan, and all or exempt money in order for us to make the transfer. We
part of the Roth portion of the payment to another IRA are allowed to transfer tax-exempt money from your
or plan (assuming you meet the eligibility requirements account only if you have no taxable money left. If you
of the receiving plan(s)). We will pay any amounts not have some taxable money but not enough to satisfy the
transferred directly to you either by check or direct percentage that you elected to transfer, we will transfer
deposit. the taxable money first and then transfer enough tax-
exempt money to make up the difference.
When requesting a transfer, be sure to
use the transfer pages provided by the The tax rules surrounding transfers and rollovers of
TSP. Do not use forms provided by the traditional and Roth balances are complex. For more
new plan or financial institution. information, read the TSP tax notice Important Tax
Information About Payments From Your TSP Account. You
TSP installment payments. If your TSP installment should also consider speaking with a qualified tax
payments are eligible, you can choose to have us advisor before making your decision.
transfer them to an IRA or eligible employer plan. Your
installment payments are eligible if they’re expected
to last less than 10 years and are not based on life Depositing Your
expectancy. See page 3. Payment(s) Electronically
As with single withdrawals, if you have only one type of Any single payment or installment payment that is not
balance (traditional or Roth) in your payment, you can transferred directly to an IRA or an eligible employer
direct all or part of your eligible installment payments plan can be sent to your checking or savings account
to only one IRA account or eligible employer plan. If electronically by direct deposit. You can have your
you have both traditional and Roth balances in your payment(s) sent electronically to only one checking or
payment, you can direct all or part of the traditional savings account at one financial institution. This is true
portion to one IRA or plan and all or part of the Roth even if you have traditional and Roth money in your
portion of your eligible installment payment to another withdrawal.
IRA account or plan (assuming you meet the eligibility
requirements of the receiving plan(s)). We will pay any
amounts not transferred directly to you either by check Withdrawal Rules for
or direct deposit. Rehired Participants
If your plan or financial institution needs us to certify If you separate from federal civilian employment or
that the money you are transferring is eligible for transfer, the uniformed services and then are reemployed by the
you can provide it with a copy of the fact sheet Transfers federal government with a break in service of less than
From the Thrift Savings Plan to Eligible Retirement Plans. It is 31 full calendar days, you are not eligible to make post-
available at tsp.gov or by calling the ThriftLine. separation withdrawals from your TSP account. If your
Rolling over your withdrawal. We will pay any break in service is 31 or more full calendar days, you
amounts not transferred directly to you either by check are eligible, but not required, to make a post-separation
or direct deposit, and you will be subject to federal tax withdrawal, but the withdrawal request must be received
withholding on any taxable amounts. Within 60 days and paid while you are still separated from service.
of receiving payment, you can still send it to an IRA or Note: If you began receiving TSP installment payments
eligible employer plan. When you make the transaction after you separated, those payments will stop if you
this way, it’s called a rollover.5 are subsequently rehired. However, if you are receiving
annuity payments, they will continue even though
you’ve been rehired.

5 The IRS may waive the 60-day rollover requirement in certain

situations if you missed the deadline because of circumstances
beyond your control.

5
Requesting Your Withdrawal If you elect to receive your total account balance as a
single payment or as an annuity purchase, the question
Once you’ve read this booklet and the TSP tax notice of traditional, Roth, or both becomes irrelevant. We’ll use
Important Tax Information About Payments From Your TSP all the money you have. But if you ask for a combination
Account and are ready to request a withdrawal, log into of the two methods and have both types of money in
My Account at tsp.gov and click on the “Withdrawals your account, you’ll be asked if you’d like the annuity to
and Changes to Installment Payments” link on the be purchased with only traditional money or only Roth
menu. From there you’ll have access to an online tool money. The online tool will only ask this if you have both
with which to start your withdrawal. types.

If you’re trying to make a withdrawal as a separated If a single payment is part of your withdrawal, you’ll be
participant, your former agency or service must have asked if you intend to transfer all or part of it.
given us your separation date before you’ll be allowed
to proceed with your request. Also, if you have an Additional Information
outstanding TSP loan, the online tool will ask if you
want to keep the unpaid balance and have it declared a for Transfers and Annuities
taxable distribution before allowing you to proceed. If If you indicate you want to transfer all or part of your
you want to pay off the loan instead, you’ll have to do withdrawal or purchase an annuity, you’ll need to
that before requesting a post-separation withdrawal. See provide additional information. See pages 4 and 5 for
the TSP booklet Loans for more information. more information.
When you begin your request, you’ll be asked whether
you intend to withdraw just part of your account or your Additional Options for
total account balance.
Your Withdrawal Request
At the time you request your withdrawal, you’ll be able
Withdrawing Part of Your Account to request direct deposit and change the default federal
If you decide to withdraw part of your account and leave tax withholding rate for any payment made directly to
the rest in the TSP, you’ll be given all of the options you.
described under “Withdrawal Methods” beginning on
page 2: TSP installment payments, single withdrawal,
Finalizing Your Request
and annuity purchase. Remember that you can choose
any of these three methods or any combination of them. When you’ve completed your online request, you’ll be
asked to submit it online if possible. If your signature
For each method you choose, you’ll be asked if you want
or your spouse’s signature is required, you’re purchasing
to withdraw from your traditional balance or your Roth
an annuity, or you’re transferring any part of your
balance. If you choose neither but have both types of
withdrawal, you won’t be able to complete the process
balances, the withdrawal will be made pro rata from
entirely online. You’ll be given a summary of your
both. (See page 4.) You’ll only be asked this if you have
request, which you—and your spouse or financial
both traditional and Roth money in your account.
institution if necessary—will need to sign, have
If you choose installment payments or a single withdrawal, notarized, and then mail or fax to us. When we receive
you’ll also be asked if you intend to transfer any part these properly completed pages, we’ll be able to complete
of your withdrawal. The online tool will stop you from the transaction you began online.
transferring any ineligible payments.
The Timing of Your Withdrawal
Withdrawing All of Your Account
It generally takes between 7 to 10 business days to
If you choose to withdraw your total account balance, process your request once you’ve properly completed and
you’ll be asked if you want to receive it as a single submitted it. We disburse withdrawals each business day.
payment, an annuity purchase, or a combination of the You can check My Account at tsp.gov or call the ThriftLine
two. (TSP installment payments are not an option since to find out the status of your withdrawal request, including
they continue to leave money in your account.) whether the payment has been made. We will also notify
you after your payment has been disbursed.

6
Changing Your Withdrawal Election eligible for the TSP count toward vesting, even if you
don’t contribute to the TSP during that time.
Before payments begin. We process withdrawals each
business day. Completed withdrawal requests that are
entered into our system by 12:00 noon eastern time
• Most FERS employees become vested in the Agency
Automatic (1%) Contributions after three years of
federal civilian service.

•
are processed that night. This means that there is a
very small window of time during which you would be FERS employees in congressional and certain
able to cancel your request and submit a new election. noncareer positions become vested in the Agency
Therefore, we recommend that you carefully consider Automatic (1%) Contributions after completing
your options before submitting a withdrawal request. two years of federal civilian service.

After payments begin. You cannot reverse a payment

that has already been processed. Also, if you have chosen
• BRS participants become vested in Service
Automatic (1%) Contributions after completing two
an annuity, you cannot change either the annuity option years in the uniformed services.
or—if you’ve chosen a joint annuity—your choice of
joint annuitant after we have processed your annuity Important: Civilian service does not count toward
purchase. vesting in a uniformed services (BRS) account, and
military service does not count toward vesting in a FERS
If you are receiving TSP installment payments. account.
Remember, you can make changes to those payments If you leave federal civilian or uniformed service before
at any time. See page 3 for details on what changes are meeting the vesting requirement for your Agency/Service
allowed. Automatic (1%) Contributions, those contributions
As with your initial withdrawal request, use the online and the earnings on them will be removed from your
tool that you will find in My Account at tsp.gov by account and forfeited to the TSP before any withdrawals
clicking “Withdrawals and Changes to Installment are disbursed. However, if you die before leaving federal
Payments.” When you’ve completed your online request, service, your entire TSP account will automatically
you’ll be asked to submit it online if possible. If your become vested.
signature or your spouse’s signature is required or you’re FERS and BRS participants are always vested in their
starting or making changes to transfers, you won’t be own contributions (and the earnings on them) and
able to complete the process entirely online. You’ll be the matching contributions their agencies or services
given a summary of your request, which you—and your make (and the earnings on those contributions).
spouse or financial institution if necessary—will need to CSRS participants and non-BRS uniformed services
sign, have notarized, and then mail or fax to us. When participants are always vested in all the money in their
we receive these properly completed pages, we’ll be able accounts since they do not include Agency/Service
to complete the transaction you began online. Automatic (1%) Contributions.

Special Considerations Spouses’ Rights

The Federal Employees’ Retirement System Act of 1986,
which created the TSP, provides certain rights to spouses
Vesting Requirements of participants. These rules do not apply to beneficiary
participants. If you are a married FERS, CSRS, or
Vesting requirements apply only to FERS participants
uniformed services participant (even if you are separated
and members of the uniformed services covered by the
from your spouse), you are subject to certain spouses’
Blended Retirement System (BRS). They do not apply
rights requirements, as explained below.
to CSRS participants, non-BRS uniformed services
members, or beneficiary participants.

If you are a FERS or BRS participant, you must have

• If you are a married FERS or uniformed services
participant with a total TSP account balance
of more than $3,500, your spouse is entitled
served for a certain number of years to be entitled to by law to a prescribed survivor annuity. This is
(or “vested in”) the Agency/Service Automatic (1%) a joint life annuity with a 50% survivor benefit,
Contributions in your account and the earnings on level payments, and no cash refund feature. If you
those contributions. All years of service in a position choose any other annuity, any other withdrawal

7
 option, or any combination of options, your tax notice Tax Treatment of Thrift Savings Plan Payments
spouse must provide signed, notarized consent for Made Under Qualifying Orders. Both are available at tsp.gov.
the withdrawal to be processed. This is also true if
you request a change in the amount or frequency
of installment payments since this could affect the Death Benefits
amount available for an annuity.
If you die with a balance in your TSP account and you
• If you are a married CSRS participant with a
total TSP account balance of more than $3,500,
did not designate beneficiaries for that account, the
account will be distributed according to a statutory
we must notify your spouse of your withdrawal. This order of precedence. If you want your account to be
is also true if you request a change in the amount or distributed in some other way, you may use Form TSP-3,
frequency of installment payments since this could Designation of Beneficiary. For us to honor it, a valid
affect the amount available for an annuity. Form TSP-3 must be on file with us at the time of your
death. We cannot honor a will or any other document.
Exceptions. Under certain circumstances, exceptions See the booklet Death Benefits Information for Participants
may be made to the TSP’s spouses’ rights requirements. and Beneficiaries for more information, including the
The conditions under which these exceptions are statutory order of precedence.
granted are very strict. To obtain more information
on the requirements for an exception—or apply for
an exception—use Form TSP-16, Exception to Spousal Required Minimum Distributions
Requirements (TSP-U-16 for members of the uniformed
If you are a separated participant, the Internal Revenue
services).
Code requires that you receive a portion of your TSP
account (your “required minimum distribution” or
Account Holds “RMD”) beginning in the calendar year when you
become age 72 and are separated from service. If you are
Some situations may cause a hold to be placed on your a beneficiary participant, your deadline for beginning
account. Examples include the following: to receive required minimum distributions depends

• A court order that awards all or part of a TSP

account to a current or former spouse (including a
on whether your spouse died before or after his or her
required beginning date.
separated spouse). Any withdrawals you make while subject to RMDs will

• A legal process that enforces obligations to pay

child support or alimony, or to satisfy judgments
be used to satisfy the requirement. If the total amount
of your withdrawals does not satisfy the requirement,
we will issue a supplemental payment for the remaining
for child abuse.

• A federal tax levy.

amount before the deadline each year.

• A criminal restitution order pursuant to the

Mandatory Victims Restitution Act (MVRA).
If we automatically send you an RMD because you did
not withdraw a sufficient amount and you have both

•
traditional and Roth balances in your TSP account, the
A hold we place on your account because of automatic RMD will be taken proportionally from each
suspected fraud. balance.

• A hold you request to protect your account. Required minimum distributions cannot be transferred

• A hold we place on your account for administrative

reasons such as account corrections or
or rolled over. This means that if you make a withdrawal
of any kind in a year that you are subject to an RMD
adjustments. and you request a transfer of all or any portion of that
withdrawal, we will first calculate and distribute any RMD
Your withdrawal request will not be accepted until the amount due directly to you before making a transfer.
matter that caused the hold is settled and the hold is
removed from your account. However, any required For detailed rules regarding required minimum
minimum distributions will be disbursed by the distributions, see the TSP tax notice Important Tax
appropriate deadline. Information About Your TSP Withdrawal and Required
Minimum Distributions. Or, for beneficiary participants,
For more information about court orders, obtain the see Tax Information About TSP Withdrawals and Required
booklet Court Orders and Powers of Attorney and the TSP Minimum Distributions for Beneficiary Participants.

8
Participants with Two TSP Accounts Reporting Changes
Some TSP participants (e.g., members of the Ready in Personal Information
Reserve) may have two separate TSP accounts—a federal Be sure to keep us informed of any changes in your
civilian account and a uniformed services account. If mailing address or other personal information that
you are one of these participants and you separate from we maintain. Otherwise, you may not receive your
either federal civilian employment or the uniformed participant statements and other important mailings,
services, you may make post-separation withdrawals including installment and RMD checks. If you close
only from the TSP account related to the type of your account, you should also inform us of any address
employment from which you have separated. change through the January of the following year, so
Once you have separated, you will also have the option that you will receive tax reporting information about
of combining your two accounts into one. However, you your withdrawal.
can only combine the account related to your separation Before you separate, your agency or service is
into your other TSP account. For example, if you are responsible for updating your personal information for
separated from the uniformed services, you can transfer your TSP account. After separating, you must make
your uniformed services account into your civilian any changes to your personal information in the My
account. If you have separated from both federal civilian Account section of tsp.gov.
employment and the uniformed services, you can choose
which account you want to keep and combine the other
one with it. To combine civilian and uniformed services
TSP accounts, use Form TSP-65, Request to Combine
Civilian and Uniformed Services TSP Accounts. This is only
allowed up to the end of the calendar year before the year
you turn 72.6

Note: If the traditional portion of your uniformed

services TSP account includes a tax-exempt balance,
you cannot transfer it into your civilian TSP account.
Therefore, you will need to retain your uniformed
services account to hold your tax-exempt money until
you wish to withdraw it. It will continue to accrue tax-
deferred earnings until you withdraw it. Any tax-exempt
money that was contributed to your Roth balance can be
transferred into your civilian TSP account.

TSP beneficiary participant accounts may not be

combined with other TSP beneficiary participant
accounts. However, if you have your own TSP account
because you are or were a federal civilian employee or
a member of the uniformed services, you may transfer
your beneficiary participant account into that account.
You cannot move your civilian or uniformed services
account into your beneficiary participant account.

6 Before 2020, the deadline was age 70½. So if you were born before
July 1, 1949, you can no longer combine accounts, even if you are
not yet 72.

9
 Glossary of Terms

Agency/Service Automatic (1%) Contributions— Federal Employees Retirement System (FERS)—The

Contributions equal to 1% of basic pay each pay period, retirement system for federal civilian employees who
contributed to a FERS or BRS participant’s TSP account were hired on or after January 1, 1984. FERS refers to
by his or her agency/service. the Federal Employees Retirement System, the Foreign
Service Pension System, and other equivalent
Annuity—A payment paid to the participant (or to the government retirement plans.
participant’s survivor if the participant elects a joint
annuity) each month. Payments continue as long as the In-Service Withdrawal—A disbursement from a
participant (or his or her survivor) is alive. Annuities are participant’s account that is available only to
purchased through an annuity vendor. participants who are still employed by the federal
government or the uniformed services.
Beneficiary Participant—A spouse beneficiary of a
deceased civilian or uniformed services TSP participant Interfund Transfer—The choice made by a participant
who has a TSP account established in his or her name. to reallocate his or her existing account balance among
the available TSP investment funds.
Blended Retirement System (BRS)—The retirement
system for members of the uniformed services who IRA—See “Roth IRA” or “Traditional IRA.”
began service on or after January 1, 2018, and others
who opted into the system. IRS Life Expectancy Tables—IRS Single Life Table,
Treas. Reg. § 1.401(a)(9)-9, Q&A 1, is used to calculate
Civil Service Retirement System (CSRS)—The installment payments based on life expectancy for
retirement system for federal civilian employees who participants who have not yet turned 72 years old by
were hired before January 1, 1984. CSRS refers to the the end of the calendar year in which the calculation is
Civil Service Retirement System, including CSRS Offset, made. For participants who turn age 72 before the end
the Foreign Service Retirement and Disability System, of that year, the Uniform Lifetime Table, Treas. Reg.
and other equivalent government retirement plans. § 1.401(a)(9)-9, Q&A 2, is used.

Contribution Allocation—A participant’s choice that Installment Payments—Payments that the participant
tells the TSP how contributions, transfers, and loan elects to receive each month, quarter, or year directly
payments that are going into his or her account should from his or her TSP account after separating from
be invested among the TSP funds. service or as a beneficiary participant. These payments
are not the same as life annuity payments.
Designation of Beneficiary—The participant’s formal
indication of who should receive the money in his or her Participant Statements—Statements that are made
account in case of his or her death. Absent a valid available to each TSP participant after the end of each
designation, the TSP account is paid according to the of the first three calendar quarters and after the end of
statutory order of precedence. each calendar year. All statements show the
participant’s account balance (in both dollars and
Eligible Employer Plan—A plan qualified under Internal shares) and the transactions in his or her account since
Revenue Code (IRC) § 401(a), including a 401(k) plan, the previous statement. Annual statements also
profit-sharing plan, defined benefit plan, stock bonus summarize the financial activity in the participant’s
plan, and money purchase plan; a 403(a) annuity plan; a account during the year covered and provide other
403(b) tax-sheltered annuity; and an eligible 457(b) plan important account data such as the participant’s
maintained by a governmental employer. personal investment performance, primary beneficiary
information, and account profile.

11
Post-Separation Withdrawal—A distribution from a from pay that is covered by the combat zone tax
participant’s account that is available only to exclusion.
participants who have left federal service or the
uniformed services. Sometimes referred to as a ThriftLine—The TSP’s automated voice response
“postemployment” withdrawal. (See also “Withdrawal.”) system. It provides general news about the TSP and
allows participants to access certain account
Qualified Distribution—A tax-free distribution from information and perform some transactions over the
the Roth portion of your account. The earnings in your telephone. You also use the ThriftLine to speak to the
Roth balance become qualified when two conditions TSP’s Participant Service Representatives.
have been met:
Traditional Balance—The portion of a TSP account
1) 5 years have passed since January 1 of the calendar balance that is made up of all employee contributions
year in which you made your first Roth contribution, designated as traditional when you (or, if you’re a
and beneficiary participant, your deceased spouse) made the
2) You have reached age 59½ or become permanently contribution election and the earnings on those
disabled, or in the case of your death. contributions. For FERS and BRS participants, your
traditional balance also includes your Agency/Service
Required Minimum Distribution—The amount of Automatic (1%) Contributions, as well as any Agency/
money, based on a participant’s age and previous year’s Service Matching Contributions made to your account.
TSP account balance, that the IRS requires be distributed Earnings on agency/service contributions are also a part
to a TSP participant each year, beginning in the year he of your traditional balance.
or she has reached age 72 and is separated from service.
Rules for starting RMDs are different for beneficiary Traditional IRA—As used in this booklet, a traditional
participants. individual retirement account described in § 408(a) of
the Internal Revenue Code (IRC), or an individual
Retirement Income Replacement Ratio—The retirement annuity described in IRC § 408(b), into
percentage of your preretirement income that you expect which a TSP participant can transfer money from his or
to need in retirement. her TSP account. (It does not include a Roth IRA, a
SIMPLE IRA, or a Coverdell Education Savings Account
Roth Balance—The portion of a TSP account balance (formerly known as an education IRA).)
that is made up of employee contributions designated as
Roth when you (or, if you’re a beneficiary participant, Uniformed Services Members—1. Active-duty
your deceased spouse) made the contribution election, members of the Army, Navy, Air Force, Marine Corps,
and the earnings on those contributions. Earnings on and Coast Guard. 2. Members of the Ready Reserve and
all Roth contributions are tax-free provided certain National Guard in any pay status. 3. Active-duty
Internal Revenue Service (IRS) rules are met. (See also members of the commissioned corps of the National
“Qualified Distribution.”) Oceanic and Atmospheric Administration and the
commissioned corps of the Public Health Service.
Roth IRA—An individual retirement account that is
described in § 408A of the Internal Revenue Code (IRC). Vesting—Receiving ownership of all money in an
A Roth IRA provides tax-free earnings provided certain account. Vesting only applies to the Agency/Service
Internal Revenue Service (IRS) requirements are met. Automatic (1%) Contributions (and their earnings)
You must pay taxes on the funds you transfer to a Roth and occurs after a participant works in the federal
IRA from your traditional TSP balance. The tax liability government or uniformed services for a certain number
is incurred for the year of the transfer. of years. All years of service in a position eligible for the
TSP count toward vesting, even if the participant doesn’t
Service Automatic (1%) Contributions — See “Agency/ contribute to the TSP during that time. Civilian service
Service Automatic (1%) Contributions.” does not count toward vesting in a uniformed services
Single Withdrawal—A withdrawal made at one time, (BRS) account, and uniformed service does not count
sometimes referred to as a “lump sum” or “single toward vesting in a civilian account.
payment.” Withdrawal—A general term for a distribution that a
Tax-Exempt Contributions—Contributions of money participant requests from his or her account. (Includes
that will never be taxed. Such contributions can be in-service withdrawals, post-separation withdrawals, and
made to the TSP by members of the uniformed services withdrawals made by beneficiary participants.)

12
 TSP Materials for Separated
and Beneficiary Participants

You can obtain the following items from tsp.gov. Also, if you are still employed as a federal civ­ilian employee,
you can obtain them from your agency personnel office; if you are a member of the uniformed services, you
can obtain them from your service TSP representative.

To withdraw from your account—

• Booklet: Withdrawing From Your TSP Account for Beneficiary and Separated Participants
• Tax Notice: Important Tax Information About Payments From Your TSP Account

For your beneficiaries to receive your account after death—

• Form TSP-17, Information Relating to Deceased Participant
• Tax Notice: Important Tax Information About Thrift Savings Plan Death Benefit Payments

To combine your civilian and uniformed services TSP accounts—

• Form TSP-65, Request to Combine Civilian and Uniformed Services TSP Accounts

Other materials—
• Form TSP-60, Request for a Transfer Into the TSP
• Form TSP-60-R, Request for a Roth Transfer Into the TSP
• Tax Notice: Tax Information for TSP Participants Receiving Installment Payments
• Tax Notice: Important Tax Information About Your TSP Withdrawal and Required Minimum Distributions
• Tax Notice: Tax Information About TSP Withdrawals and Required Minimum Distributions for Beneficiary
Participants
• Tax Notice: Tax Treatment of Thrift Savings Plan Payments Made Under Qualifying Orders
• Booklet: Court Orders and Powers of Attorney
• Booklet: Death Benefits Information for Participants and Beneficiaries

13
 TSPBK02 (9/2020)
PREVIOUS EDITIONS OBSOLETE