What are the New Rules for TSP Withdrawal Options?

What are the new rules for TSP withdrawal options? TSP stands for Thrift Saving Plan, meaning the plan for investments and retirement savings. This program is currently widely available in many banks and finance companies.

Sure, it allows the customers to save and invest their funds to be withdrawn later when their retirement has come. Although it sounds simple, in general, there are some rules and requirements to fulfill if the customers want to withdraw their money. You can choose one of them to make your money accessible. They are distributing lump sum, withdrawing installments, and choosing an annuity.

Distributing Lump Sum

The first option as well as the rule to access TSP is distributing a lump sum. There is an agreement made for the first time you start saving. Then, when you have retired from your job, you can claim it by showing the related documents as proof.

With some terms and conditions to agree upon by all parties involved, you can access and withdraw the money. You are even allowed to withdraw your money every 30 days, just like the pension savings of civil workers. It is also possible to withdraw the entire saving at once.

Withdrawing Installments

The second rule provided for TSP customers is to withdraw the installments. Well, for this option, the mechanism is as follows. When you are still productive, you deposit a certain amount of money every month or every year for TSP. This way, you can choose a certain amount of money to transfer to you every month after retiring. The amount of money is $25 minimum.

The money is paid to you regularly based on the agreement that has been made, whether it is every month, every 3 months, or every year. Besides, you can also choose to pay and receive the installments based on the estimation of life expectancy.

Interestingly, there are some features available in this option including stopping the program or changing the amount. Of course, you must contact the bank or the service provider first.

Choosing Annuity

The last action to choose is the annuity. This option provides some alternatives of income sources to guarantee your entire life. However, you must pay it by allowing the bank to control all or some parts of your money.

For this option, there are some types of accountability to choose from, they are retirement funds for singles, couples, or even the fund is for someone else. The last option is if there is someone whose life depends on you entirely.

Additional Option: Gold IRA

Although this one is not included in the main options available in TSP, as long as you fulfill the requirements given, you can choose this one. Gold IRA is to save your fund in the form of gold for the sake of your retirement. This investment method is considered beneficial particularly to keep the value of money.

You know that money value tends to decrease every year because of factors like inflation. By saving it in the form of gold, it is expected that you can get the same value in the future as what you have now. Some banks and finance companies also combine the gold IRA method with other options mentioned earlier whether it is a lump sum, installments, or an annuity.