This isn’t the case with the TSP. Not only are you responsible for saving and managing the account to accumulate a balance in the first place. But you’re also responsible for managing the distribution of the account to create income from it. It is how you manage distributions that determine how long your money will last? How much tax liability you’ll incur? How much income you’ll receive along the way? With an imminent increase in taxes, increasing healthcare costs, inflation, and a higher longevity than past generations, it is more important than ever to maximize this important asset.
The TSP contains the most overlooked opportunity for Federal employees. But it is also prone to the most mistakes, many of which are irreversible and trigger significant and unnecessary taxes and/or unnecessary risk. Our goal here is to make you aware of the basic options available to you and to encourage you to learn more about the critical considerations around this topic.