For most federal employees, the Thrift Savings Plan (TSP) ends up being one of the largest retirement assets they have. You’ve spent decades contributing steadily, watching that account grow—but now you’re approaching the next big question:
How do I actually take money out of my TSP once I retire?
This part—deciding how and when to withdraw—can feel even more complicated than saving in the first place. But with the right strategy, your TSP can do exactly what it was designed to do: help fund your retirement for the rest of your life.
Let’s break it down.
The Shift From Saving to Spending
During your working years, your focus is on contribution: put money in, grow the balance, keep fees low.
But in retirement, the goal shifts completely. Now, you’re thinking about:
- How to turn your savings into reliable monthly income
- How to avoid big tax surprises
- How to make sure you don’t outlive your money
The TSP gives you several withdrawal options—but it doesn’t give you a strategy. That’s where a little planning makes a big difference.
The Most Common TSP Withdrawal Paths
Many retirees start with monthly payments from their TSP. Others take out a lump sum. Some move the money into an IRA or annuity.
There’s no one-size-fits-all answer—but there is a way to match the approach to your goals.
If you want simplicity and control, monthly payments from the TSP itself may be enough. But if you want guaranteed lifetime income—something you can’t outlive—it often makes sense to roll over some or all of your TSP to a personal retirement plan designed for that purpose.
Why Many Federal Retirees Choose to Roll Over
One strategy we use with our clients is helping them roll over part of their TSP into a lifetime income annuity—a private retirement product that guarantees a monthly paycheck, no matter how long you live.
This approach offers:
- Consistent, predictable income
- Optional spousal protection
- Principal protection (no market downside)
- More control over taxes and legacy planning
Think of it as creating your own “private pension” using the money you’ve saved in your TSP.
You don’t have to move everything—just the portion you want to dedicate to long-term income.
How We Can Help
At Independence Benefits, we work exclusively with federal employees. We’ve helped thousands of FERS retirees across every agency transition into retirement with clarity and confidence.
In your complimentary retirement consultation, we’ll sit down with you to:
- Review your pension estimate and survivor options
- Build a personalized TSP withdrawal strategy
- Explore whether a lifetime income solution fits your goals
- Compare your FEGLI coverage with private life options
- Talk through your Social Security game plan
- Answer any questions you have—no pressure, no sales pitch
Your TSP is more than a savings account—it’s a tool. And when used wisely, it can help you retire with peace of mind, income you can count on, and a plan you feel good about.
If you’re within five years of retirement—or already retired—it’s never too early (or too late) to get a second opinion on your strategy.
Let’s build your personal retirement roadmap together.
Book your complimentary session here