How do I take money out of my TSP in retirement?

Rules checked October 18, 2026, against tsp.gov

Your withdrawal options

The Thrift Savings Plan (TSP) lets separated participants use these options alone or in combination (TSP: Withdrawals in retirement and TSP: Distributions booklet):

Installments keep your money invested in the funds you choose. You can pick a fixed dollar amount, or let the TSP figure a payment from IRS life expectancy tables, recalculated each January. You can stop or change installments at any time, though some changes mean stopping the old series and starting a new one. Payments continue until you stop them or the balance hits zero.

Partial withdrawals are useful for one-time needs such as a new roof or a car, or for topping up cash when the FERS supplement ends at 62.

Leaving money in is a real option. You aren't required to take anything until required minimum distributions begin. You can also roll money into the TSP from eligible employer plans and traditional IRAs after you leave. Withdrawals can't be reversed once processed, so check requests carefully.

Buying an annuity

You can use all or part of your balance (at least $3,500, counted separately for traditional and Roth money) to buy a life annuity from the TSP's annuity vendor. It pays a monthly amount for life, either for you alone or jointly with another person. The TSP's annuities fact sheet explains the payment and survivor choices.

The trade-off: once purchased, "you cannot change or cancel the purchase," and the money is no longer yours to invest or leave to heirs (beyond any features you choose). The payment depends on interest rates when you buy. The TSP posts current and past rates on its historical annuity rates page and has an annuity calculator.

Spouse's rights

If you are married, under FERS, and your balance is over $3,500, your spouse is entitled by law to a joint life annuity with a 50% survivor benefit, level payments and no cash refund. To choose anything else (installments, a partial withdrawal, or a different annuity), your spouse must sign a consent. Consent is also required to change installment amounts or frequency. Exceptions are rare (TSP: Distributions booklet). Plan for this paperwork, especially if your spouse travels or lives elsewhere.

The 10% penalty and the age 55 rule

Taxable withdrawals before age 59½ normally carry a 10% IRS early withdrawal penalty on top of income tax. The TSP's tax booklet lists the exceptions that matter most to federal retirees (TSP: Tax rules about TSP payments):

• Separation at 55: payments made after you separate "during or after the year you reach age 55."
• Public safety employees: payments after you separate during or after the year you reach 50, or with 25 years of service. This covers federal public safety jobs such as those under the special retirement provisions. Check the booklet for the exact definition.
• Life expectancy installments: substantially equal payments over your life expectancy. Be careful: if you stop them, switch to fixed amounts or take another withdrawal within five years or before 59½ (whichever is later), the penalty can apply after the fact.
• Disability and death.

These exceptions apply to money paid from the TSP. If you move money to an IRA, the IRA's own rules apply instead, so check how the penalty exceptions work there before you roll money out in your 50s.

Traditional and Roth money

Many people have both. For any withdrawal, you can take from traditional only, from Roth only, or pro rata in the same proportions as your account. For installments, you choose which source to draw first, and when it runs out, payments continue from the other.

Roth TSP earnings are tax-free only in a qualified distribution, which needs both of these (TSP: Tax rules booklet):

• 5 years have passed since January 1 of the year you made your first Roth TSP contribution, and
• you are 59½ or older, permanently disabled, or deceased.

Your own Roth contributions always come out tax-free. In a non-qualified withdrawal, the earnings portion is taxable.

Required minimum distributions

Required minimum distributions (RMDs) are the smallest amount the IRS makes you take each year once you reach a set age and have left federal service. The TSP booklet gives these ages:

Your first RMD is due by April 1 of the year after you reach your RMD age (or after you separate, if later). Only your traditional balance counts. The booklet says "Roth money in your account isn't subject to RMDs." If your installments don't cover the RMD, the TSP sends a supplemental payment. RMD amounts can't be rolled over.

Taxes and withholding

Traditional TSP withdrawals are taxed as ordinary income. The TSP withholds federal tax based on the type of payment (TSP: Tax rules booklet):

Withholding is a prepayment, not your final tax. Your real bill depends on your total income, including your FERS annuity and Social Security. The TSP does not withhold state or local tax, but it reports payments to your state if your state has an income tax.

What to do next

1. Log in and check your balances. Know your traditional and Roth amounts.
2. Mind the year you separate. If you're close to 55 (or 50 in public safety), the calendar year you leave can matter for the penalty.
3. Get spousal consent ready if you're married and want anything other than the joint annuity.
4. Read the two booklets. The TSP's Distributions and Tax Rules booklets are the official word.
5. Ask a tax professional about withholding and Roth timing for your situation.

General information, not advice. We aren't part of the TSP or the Federal Retirement Thrift Investment Board. The TSP's ThriftLine and booklets give official answers, and a tax professional can help with your tax situation.