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TSP Share Prices and Withdrawal

TSP Share Prices and Withdrawal

Federal employees who are considering a TSP withdrawal after leaving federal service tend to spend a whole lot of time figuring out complex investment and TSP withdrawal strategies to optimize the returns and minimize the tax hit. However, most of it is based on choosing the correct TSP withdrawal option for you, which can include a full or partial TSP Withdrawal, a single payment, monthly payments, a TSP lifetime annuity, or a TSP to IRA rollover, etc.

However, a seemingly wasted effort, is to focus solely on TSP share prices. Many federal employees spend an inordinate amount of time looking at the TSP fund performance page where you will find daily, monthly, annual, and historical share prices for the individual core TSP funds, as well as all the Lifecycle (L) funds.

Do TSP Share Prices Make a Huge Difference in Your Withdrawal Amount?

The primary impact of TSP Share prices on the timing of your TSP withdrawal is more dependent on what you will be putting your TSP funds into after you leave federal service. If you are going to put your money into a money market account after you retire then yes, the TSP share prices on the day you perform your TSP rollover will become incredibly important as you would seemingly be putting your money into an extremely low, or no growth account.  But if you are going to explore other TSP alternatives with a highly-qualified TSP expert, then you are likely to realize that a TSP to IRA rollover could give you access to thousands of potential TSP alternatives that may make the TSP share prices on the date of your rollover far less important.