How to Withdraw From TSP After Retirement: Step-by-Step for Federal Retirees

Before You Can Withdraw: Two Prerequisites

You can't access your TSP withdrawal options the day after your retirement ceremony. Two things have to happen first, and both take time.

Your separation must be reported to the TSP. Your agency's payroll office processes your final paycheck, calculates your annual leave lump-sum payout, and transmits a separation code to the TSP record keeper. This typically takes 30 to 45 days. Until the TSP receives that code, your online account still shows "Active" and the withdrawal wizard is locked.

You must be separated for at least 31 days. Even if the code arrives quickly, federal regulations require 31 consecutive calendar days of separation before you can request a post-separation distribution.

During this waiting period, your balance stays invested. You can still log in to view your account, change fund allocations, and update your contact information — you just can't take money out yet.

Step 1: Set Up Your Destination Accounts

Before requesting any withdrawal, register the accounts where you want the money to go. In the My Account portal on TSP.gov:

• Add your bank account details for direct deposit of cash distributions.
• If you plan a rollover, add the receiving financial institution's name, address, and your account number.

The TSP enforces a 7-day security hold on any new banking or institution details. Register these early — ideally as soon as your separation is processed — so the hold runs while you're completing other steps.

Step 2: Settle Outstanding Loans

If you have any TSP loans (general purpose or residential), you have three options:

1. Pay off the balance in full by the deadline the TSP sets after separation.
2. Keep the loan active with monthly payments via personal check, money order, or recurring debit.
3. Let it foreclose. The unpaid balance plus interest becomes a taxable distribution reported on Form 1099-R. If you separated before the year you turned 55, the 10% early withdrawal penalty may apply on top.

If a loan forecloses and you want to undo the tax hit, you can perform a "qualified plan loan offset" rollover — depositing an amount equal to the foreclosed balance into a traditional IRA using personal funds. This must be completed by the due date of your tax return (including extensions) for the year the foreclosure occurred.

Step 3: Choose Your Withdrawal Type

The TSP offers four post-separation withdrawal methods. You're not limited to one — you can combine them.

Partial withdrawal. A one-time lump sum of $1,000 or more. No limit on how many you take. The remaining balance stays invested. Good for covering specific expenses.

Installment payments. Recurring distributions — monthly, quarterly, or annually — either as a fixed dollar amount (minimum $25) or calculated based on IRS life expectancy tables. You can change the amount, frequency, or stop payments at any time.

Total distribution. Empties the account completely. Once processed, you lose the ability to roll outside retirement funds back into the TSP. The account is effectively closed.

TSP life annuity. Converts $3,500 or more into a guaranteed monthly income stream through MetLife. Irrevocable (though the 2026 contract includes a 3-year cancellation option). Multiple configurations: single life, joint life with spouse, 10-year certain, cash refund, increasing payments.

For each method, you choose whether to pull from your traditional balance, Roth balance, or a pro-rata mix.

Step 4: Handle Spousal Consent

Married FERS and uniformed services participants face spousal consent requirements:

• Partial withdrawals: Notarized spousal consent is required for every partial withdrawal, regardless of amount.
• Total distribution (balance over $3,500): Your spouse is legally entitled to a joint life annuity with 50% survivor benefit. To choose any other option, your spouse must sign a notarized waiver.
• Installment payments: Spousal consent required for the initial setup.

The withdrawal wizard generates Form TSP-99 (WEB). Print it, get your spouse's notarized signature, and upload the completed document through the secure portal.

CSRS participants: Only written notification to your spouse is required — no consent, no signature, no notarization.

Step 5: Submit and Track

After completing the wizard and uploading any required spousal consent, submit the request. Key details:

• Cancellation window: You can cancel or modify until 12:00 p.m. Eastern on the scheduled processing date.
• Direct deposit timing: Funds typically settle in your bank account within 10 to 15 business days after approval.
• Rollover checks: Mailed via first-class mail, payable to the receiving institution. Add mail delivery time.

Step 6: Tax Documentation

By mid-January of the year following your withdrawal, the TSP mails IRS Form 1099-R showing the gross distribution, taxable amount, and federal tax withheld. A digital copy is available in your My Account mailbox by mid-February. Report this on your federal income tax return.

Withdrawal Summary at a Glance

The Complete Withdrawal Playbook

The TSP Withdrawal & Drawdown Strategy Guide walks through the entire post-separation sequence — from pre-separation account verification and loan settlement through every withdrawal type, tax withholding election, and RMD obligation — organized as a checklist you can work through at your own pace.

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