Taking Distributions from Thrift Savings Plans

The Thrift Savings Plan is for members of the military and federal employees.
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The Thrift Savings Plan (TSP) is part of the federal retirement system. Similar to a private 401(k), the TSP is designed to help members of the uniformed services, and both current and retired federal workers, save for the long-term. You can take distributions from your TSP in one of several ways. Rules allow for partial or complete distributions that can be received in one lump-sum payment or spread out through monthly installments.


The term "withdrawal" is used in TSP literature to refer to a distribution payment. This term is used to refer to both distributions taken both while serving and after separation from service. Regulations require that TSP account-holders take distributions the year following the year of separation from service, or the year following the year the account holder turns 70 1/2 years of age -- whichever is later. Distributions can be in the form of monthly payments or one lump-sum payment.

One-Time Early Distribution

A one-time distribution from your TSP account can be taken after you leave federal service. You can take $1,000 or more if you did not take a distribution prior to separation based on age requirements. Later, you can set up another partial or full distribution from the account. Remember that distributions are subject to federal income taxation.

Full Distribution

To take distributions of the entire balance in your TSP account, the plan offers several options. First, you can withdraw the full balance if you so choose. Or, you can take monthly distributions based on the IRS' life expectancy tables. The plan administration uses these figures to set your monthly payment and recalculates annually. Another option offered is for you to choose an amount you wish to receive each month of $25 or more, and your distributions will be paid as you specified until the account balance is depleted.


You can take distributions from your Thrift Savings Plan by authorizing the TSP to buy an annuity for you. This method of receiving your savings requires a minimum annuity purchase of $3,500. A life annuity can provide monthly payments to you for the rest of your life. Another option is to choose a joint life annuity that includes your spouse and pays the surviving spouse for the duration of her life. A joint life annuity with a beneficiary of your choice is also available. When one of the two people dies, the other is paid for the remainder of his life. The TSP will set the annuities up for you if you choose this means of taking distributions.

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