You’re preparing to leave the federal workforce — so what’s the most effective way to withdraw money from your Thrift Savings Plan?

Tom Trabucco, director of external affairs at the Federal Retirement Thrift Investment Board, told the DorobekINSIDER there are three options for feds leaving public service:

1. ‘Take the whole pile’
   Trabucco said retired federal employees can take their entire TSP investment and transfer it to an IRA or eligible plan without a tax penalty. Employees can also put their TSP funds in another type of investment, although most people don’t want to “take the tax hit,” he said.
2. Monthly payments
   In terms of number of participants, the monthly payments are the most popular withdrawal option, Trabucco said.

   Participants can choose any amount for their monthly payment down to $25, and they can change the amount once a year, he said.

   This option offers the convenience of supplementing a basic annuity, Trabucco said.

3. Purchase an annuity
   The FRTIB will purchase an annuity through Metropolitan Life Insurance. MetLife offers 16 different kinds of annuities, Trabucco said.

   This option is not very popularly because interest rates are so low, “so annuity payments are not particularly large right now,” he said.

Check out the article in FedSmith about TSP withdrawal options. TSP_december

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.