TSP Retirement Planning Guide

An honest framework for the decisions at hand. Not tax or investment advice — your specifics matter.

The TSP is one of the best retirement vehicles in America

• Net expense ratios on the core funds (C, S, I, F, G) run about 0.05%, consistently among the cheapest in the industry.¹
• The G Fund is genuinely unique: a special-issue Treasury security earning the weighted-average yield of longer-dated Treasuries but redeemable at par — so you get the yield without the price-risk of a long bond fund.² Nothing comparable exists outside TSP.
• Don't roll TSP out purely for "fund choice flexibility" — the expense-ratio penalty typically exceeds the optimization gain.

Withdrawal flexibility — what changed in 2019

• Pre-2019: TSP withdrawal options were infamously limited (single lump sum, fixed monthly payments, or life annuity).
• Post-2019 (TSP Modernization Act of 2017, Public Law 115-84): monthly payments can be changed at any time, partial withdrawals allowed, in-service age-59½ withdrawals, age-based and hardship withdrawals, multiple distribution methods combinable.³
• TSP added in-plan Roth conversions on January 28, 2026 — you can now convert traditional TSP balance to Roth TSP directly, up to 26 times per year, without leaving TSP. See the full mechanics: TSP In-Plan Roth Conversion Guide.

Coordinating TSP with FERS and Social Security

• FERS retirement is a 3-legged stool: FERS basic annuity + TSP + Social Security. TSP is the variable component.
• FERS annuity + SS typically cover 60-80% of pre-retirement income. TSP covers the rest plus inflation protection.
• FERS supplement (if retiring before 62) bridges to SS — factor into TSP withdrawal rate.

Roth TSP vs Traditional TSP

• If your current tax bracket is lower than your expected retirement bracket, Roth wins.
• Most federal employees in GS-13+ brackets are already in the 24% bracket, likely dropping to 12-22% in retirement — traditional often wins marginally.
• Hedge: a mix of both. You'll have control over taxable income in retirement via withdrawal mix.

When rolling out of TSP makes sense

• Custom bond allocation: For bonds beyond the F Fund (e.g., TIPS, corporates, munis), you need an IRA.
• Custom bond allocation: F Fund is bond aggregate; if you want TIPS, corporates, munis, you need IRA.
• Consolidation with spouse's estate planning: IRAs offer more beneficiary flexibility.
• Don't roll out just because an advisor gets AUM fees on IRA money and none on TSP money.

Sources

1. TSP — Fund Performance and Expense Ratios (annual fund sheets).
2. TSP — G Fund: Government Securities Investment Fund. Special-issue Treasury redeemable at par.
3. TSP Modernization Act of 2017 (Public Law 115-84). Effective September 2019.
4. SECURE 2.0 Act § 325 — Eliminated Lifetime RMDs on Roth 401(k)/Roth TSP (effective 2024).
5. OPM — FERS Information (3-legged stool: FERS basic + TSP + SS).

TSP is administered by the Federal Retirement Thrift Investment Board (FRTIB). Fund details and withdrawal rules verified against tsp.gov as of April 2026.