What Do I Do With My TSP After I Retire?

What happens to TSP when you die?

A beneficiary who is not a surviving spouse cannot retain a TSP account.

The death benefit payment will be made directly to the beneficiary or to an “inherited” IRA.

If a beneficiary participant dies, the new beneficiary(ies) cannot continue to maintain the account in the TSP..

What is the average amount in TSP balance at retirement?

The average Thrift Savings Plan balance for Federal Employees Retirement System participants — 3.3 million people — was $138,933 in January. That compares to an average TSP account balance of $146,642 for the 314,193 Civil Service Retirement System participants.

How many TSP millionaires are there?

45,200 TSP millionairesCurrently there are just above 45,200 TSP millionaires—out of some 5.8 million accounts, including current and retired federal and military personnel and survivors—up by 18,000 from the end of March but not yet back to the 49,600 at year-end 2019.

Is TSP a good retirement plan?

When it comes to employer-backed 401k plans, most experts say the TSP, with its 5% match and super-low administrative fees, is the best deal around. At the end of May 2019 the TSP had 5,666,894 participants. The average account balance for FERS employees fell around $140,350 and for CSRS workers, it was $149,145.

How much is taxed on a TSP withdrawal?

We’ll withhold 10% on the taxable portion of your withdrawal for federal income tax.

Is TSP better than 401k?

Overall, the Thrift Savings Plan compares favorably to 401(k) plans, and if you work for the Federal government and can participate, it very likely makes sense to do so. It serves as a solid adjunct to the FERS pension, and the combination of the TSP and FERS can provide a solid foundation for retirement.

What is the 4 rule in retirement?

One frequently used rule of thumb for retirement spending is known as the 4% rule. It’s relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.

How long will 500k last in retirement?

If you have $500,000 in savings, according to the 4% rule, you will have access to roughly $20,000 for 30 years. Retiring abroad in a country in South America may be more affordable in the long term than retiring in Europe.

Should you max out your TSP?

The Thrift Savings Plan (TSP) is a great tool for federal employees to save for retirement. Saving, and even maxing out your contributions to TSP is normally thought of as a good thing. Yes, maxing out your TSP can be very beneficial, but may not be the best thing for your financial future.

What states do not tax TSP withdrawals?

The no-income-tax states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

What is the average 401k balance for a 55 year old?

Average 401(k) balance by ageAgeAverage 401(k) balanceMedian 401(k) balance35 to 44$61,238$22,12345 to 54$115,497$40,24355 to 64$171,623$61,73865 and up$192,887$58,0352 more rows•Jul 20, 2020

Should you leave your money in TSP after retirement?

If you don’t need the cash in your account or an immediate TSP annuity to make ends meet when you retire, you can leave your account active. … Retirees often consider moving their TSP account to another service to take advantage of a more diverse investment mix.

How long does it take to get TSP money after retirement?

10 daysYou should expect it to take up to 10 days from the time the TSP receives your request until the time you receive the check. But what if you’ve recently retired from federal service and you’re ready to begin withdrawing the money you’ve saved in the TSP to help provide retirement income?

Why is TSP bad?

The TSP is possibly the most inefficient account to use for a down payment and to pay for college. Savings in an individual account or a Roth IRA would be much better for the down payment as well as paying for college. A 529 plan would also work well to pay for college.