TSP Share Prices and Withdrawal

TSP Share Prices and Withdrawal

By Alec
4th Dec, 2024

Federal employees who are considering a TSP withdrawal after leaving federal…

Key Takeaways

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 a 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.

Another option that some federal employees make is to elect a TSP annuity upon retiring from federal service.  Although the attraction of guaranteed lifetime income offered by the Thrift Savings Plan annuity may seem attractive at first we always recommend that retirees compare this option against alternatives.  It is our experience that the TSP annuity may not be the best option.  If you do choose the TSP annuity then, yes, the current value of your TSP funds will become very important as the initial value of your TSP annuity will determine your lifetime income, without the potential of growth beyond the prescribed amount offered through the TSP.

Alec Disclosure:

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged.

It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using 'Content here, content here', making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for 'lorem ipsum' will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).

Avoiding the Biggest TSP Mistakes ebook, TSP mistakes guide ebook, Federal employee TSP mistakes ebook, TSP withdrawal mistakes ebook, TSP fund selection ebook, Agency match TSP ebook, Retirement planning for federal employees ebook, TSP annuity mistakes ebook, TSP investment advice ebook, Avoid TSP errors ebook

Avoiding the Biggest TSP Mistakes as a Federal Employee

Related Post

Related Alec Posts

TSP Withdrawal Into A TSP Life Annuity
6th May
By TSP Admin

TSP Withdrawal Into A TSP Life Annuity

One of your many options, when you want to make a TSP withdrawal, is to…

Read More
TSP Annuity vs. Monthly Payments – Strategies and Goals
4th Dec
By Koga Bag

TSP Annuity vs. Monthly Payments – Strategies and Goals

Read More
Withdrawal Guide for TSP Beneficiary Participant Account
12th May
By TSP Admin

Withdrawal Guide for TSP Beneficiary Participant Account

Assuming an account balance of $200 or more, the spouse beneficiary….

Read More