Using Your TSP for Regular Income

Making regular contributions to your Thrift Savings Plan (TSP) account as a federal employee further enables you to make withdrawals from it at a future date. As you watch the balance grow with time, it’s easier to feel more confident in each contribution, considering how it will serve as a monthly income stream throughout your retirement years. By relying solely on Social Security, the vast majority of Americans will come up short by as much as 80% without an additional source of income, such as a TSP.

During retirement, many retirees will receive their TSP payments in the form of a recurring withdrawal. More than half of all separated employees request monthly payments from their TSP to provide a regular income stream. Your average monthly installment plan payments are distributed every month. However, retirees have the option of choosing between quarterly or annual payments instead. Installment plans serve as an avenue to keep your money invested into the Thrift Savings Plan (TSP) for future growth.

A TSP life annuity, by comparison, can be withdrawn to purchase premium immediate annuities instead. While either type of TSP provides recurring payments, either option has vastly differing rules. A TSP life annuity cannot be changed, carrying a guarantee that you won’t run out of money throughout your lifetime. This means less time spent paying attention to investments and more time spent enjoying your golden years.

Individuals choosing an installment plan can start or stop their payments at any point and even change the number of their payments throughout the year. However, regarding keeping an eye on investments, withdrawals from installment plans require more attention to ensure you have enough to continue receiving monthly payments. As with a life annuity, installment plans also allow you to choose payments depending on whether you prefer increasing or leveling payments.

If you struggle to determine which option will best fit your needs moving forward, many online calculators will assist with calculating payments. Although a calculator isn’t currently available through the TSP website, the calculators available through third parties provide crucial insight into your financial planning options. Regardless, monthly payments are one of the most popular payment options among separated federal employees. This payment option offers both the possibility of continued investment growth and flexibility in terms of monthly payment occurrence.

When determining the best payment route for your retirement income requirements, it’s important to anticipate your future needs. Recurring monthly payments will enable your investment to grow, throughout your retirement years, in a simple yet diversified way. By taking the time to understand the retirement options made available to you early on or speaking with a financial advisor, you will be well-equipped to make maximum allowable contributions you can enjoy and live off of for many years.

Contact Information:
Phone: 9568933225

Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

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