Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Three (or More) Helpings of the TSP

My column last week on Thrift Savings Plan withdrawals attracted several responses like this one:

I do not understand what the following statement from your column is saying: “If you want to take out money on an ‘as-needed’ basis, the TSP doesn’t offer the ability to take more than three partial distributions.”  Would really appreciate an explanation!

Or this:

I was aware of the ability to take two partial distributions, but how do you take the third?

Many people think that there is only one partial TSP withdrawal available after you separate from federal service and that you then must take a full withdrawal. But to every rule, there are exceptions.

Here are three ways -- and maybe four -- that you can take partial withdrawals after your federal service has ended.

Partial Withdrawal No. 1

There is a post-separation, one-time partial distribution. This allows separated employees to withdraw a portion of their TSP balance and leave the remainder invested until later. Use Form TSP-77 for the withdrawal.

There’s also an option for employees who stay in federal service beyond age 59 ½ to exercise this one-time partial distribution as an “age-based in-service withdrawal” by using Form TSP-75. If you make ...

You’ve Invested for Retirement. Now What?

Federal employees have done a fabulous job of accumulating wealth in the Thrift Savings Plan since 1987. Collectively, the nearly 4.7 million TSP participants have more than $400 billion in traditional (tax-deferred savings and growth) TSP accounts and a little over $2 billion in Roth (after tax savings, tax-free growth) accounts.

That’s incredible, considering that the TSP is still relatively young -- it will celebrate its 28th anniversary in April. Some of you may remember that in the early years there were many more restrictions on how much you could contribute and how you were able to manage your investments. For example, it wasn’t until 1992 that you were able to invest 100 percent of your money in the C and F funds. The S and I funds didn’t exist until 2001, and the Lifecycle options weren’t available until 2005.

So now the question is, what’s going to happen with all the money that federal employees have diligently put away? Remember, there are three stages to investing for retirement:

  • Accumulating wealth
  • Preserving wealth
  • Distributing wealth

Both the people who manage the TSP and many of its participants have reached the point where they’re concerned ...

Who’s Paying for Your Health Insurance?

I recently had an interesting email exchange with a retired U.S. Army reservist who is also a retired federal civilian employee. He told me that during the recent health benefits open season, he decided to enroll in TRICARE, the health care program for military service members and retirees. He opted to suspend his Federal Employees Health Benefit Program plan.

His question was: “What happens to the approximately 75 percent that the government was paying into the FEHBP? Was that dropped, too?” He noticed that when he received his Feb. 1 annuity statement from the Office of Personnel Management, his premium had dropped from $444 per month to $0. He wondered if the government stopped paying its portion of his former FEHBP plan, which cost $971.90 a month. “How does TRICARE cover such an amount, since they apparently take nothing out of my military annuity for health care?”

He also noted that the copays for TRICARE standard are similar to FEHBP (20 percent if in network), and the yearly family deductible to meet is actually lower than in his Blue Cross Blue Shield FEHBP plan. Expenses covered under the two plans seem fairly similar. So is it correct to ...

Neither CSRS nor FERS

It’s been a while since I’ve written about a group of federal employees who sometimes feel overlooked or forgotten -- those who are are neither under the Civil Service Retirement System or the Federal Employees Retirement System. Rather, they’re in a system that has some of the elements of both, but with a few complicated twists -- CSRS Offset.

CSRS Offset covers employees who completed at least five years of civilian federal service creditable under CSRS, but who also have come under the Social Security system at some point. I’ve written about this program in the past. These three columns should answer most questions about CSRS Offset:

  • Best of Both Worlds An introductory description of CSRS Offset, along with a little history and some resources.
  • Understanding CSRS Offset An overview of the system, with an explanation of how the offset is computed at age 62 or at the time of retirement, if later.
  • Complicating Factors A look at what happens when a CSRS Offset retiree is married to CSRS retiree and the CSRS Offset retiree dies.

I recently received a question from a reader about CSRS Offset that I think sheds some light on the system, and provides ...

Is FERS Better? Readers Weigh In

Last week’s column, Unlocking the Secrets of FERS, received a huge response. I figured it would, since I attempted to point out the benefits of coverage under the Federal Employees Retirement System over the Civil Service Retirement System for certain federal workers. That’s always a subject of hot debate.

It was encouraging to see many people recognize that any comparison of FERS and CSRS must take into account that CSRS was designed as a single benefit plan that stands alone, while FERS is a three-tiered plan featuring a basic benefit, Social Security and Thrift Savings Plan investments. So evaluating the two systems, as one reader noted, “is a little like comparing apples and oranges.”

But readers of the column certainly had their opinions and perspectives on CSRS and FERS. Here’s a recap of some of the comments I received.


  • “I retired CSRS after 34+ years. I'm really happy with my pension. A few of my peers switched to FERS in one of the open enrollment periods and all are sorry they did.”
  • “No kidding, CSRS and FERS are as different as night and day. CSRS is way better. This article did nothing to change ...