Updated: August 29, 2026
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The Thrift Savings Plan gives a separated participant four officially documented ways to take money out of the account. Consumer articles frequently blend these into a single fuzzy list of “options.” The tsp.gov booklets treat each method as a distinct election with its own paperwork, its own minimum, and its own tax and rollover mechanics.
This page documents the mechanics of each of the four withdrawal methods, plus the implicit fifth choice of leaving the balance in the plan. It does not recommend one method over another. Those choices belong to the participant and their tax professional. Every figure and rule on this page is drawn from the current tsp.gov booklets (tspbk25 and tspbk26) and the tsp.gov withdrawals-in-retirement guidance.
Method 0: leave the balance in the TSP
The implicit fifth choice is to do nothing right away. A separated participant whose vested account balance is at least 200 dollars can leave the money in the Thrift Savings Plan indefinitely. The account continues to earn returns based on the fund allocation the participant has on file. The participant can rebalance, change the contribution allocation for existing balances, and take an interfund transfer at any time.
Leaving the balance in the plan does not defer the required minimum distribution rules. Once a separated participant reaches the applicable RMD age (73 for those turning 72 after December 31, 2022, under SECURE 2.0 Act section 107), the TSP begins computing and paying an RMD each calendar year. The RMD is drawn automatically from the account each December if no other qualifying distributions cover the required amount.
Participants with a vested balance under 200 dollars have that residual amount automatically distributed shortly after separation. It cannot stay in the plan. The distribution is cashed out and mailed as a check, subject to the standard tax and withholding rules on a lump-sum payment.
Method 1: partial distribution
A partial distribution moves a specified portion of the account balance out of the plan while the remaining balance stays invested in the participant’s chosen funds. The minimum amount for a single partial distribution is 1,000 dollars. There is no maximum other than the current balance.
The participant selects a dollar amount on the My Account withdrawal request. The TSP then executes the payment either as a cash distribution to the participant, as a direct trustee-to-trustee rollover to a receiving IRA or eligible employer plan, or as a mix of the two. A separated participant can request a new partial distribution every 30 calendar days from the prior request. There is no lifetime cap.
The partial distribution is the single documented method that supports a rollover-eligible partial payment. A participant who wants to move part of the balance out of the plan while leaving the rest invested in the TSP uses this election. The traditional and Roth portions can be routed to different receiving accounts on the same request. The 1099-R code follows the routing (G for direct rollovers; 1, 2, or 7 for cash based on age and exception).
Method 2: total distribution
A total distribution pays out the entire remaining balance in a single transaction and closes the account. Once processed, the participant has no further TSP account and no ability to request another partial or start installments. The election is final for that account number.
Like the partial distribution, the total distribution supports cash payment, direct rollover, or a mix routed by balance type. The Roth portion can go to a Roth IRA while the traditional portion goes to a Traditional IRA in the same request. The 1099-R code follows the routing rule already described. A total distribution reported entirely under code G reflects a full direct rollover with no cash reaching the participant.
A participant who takes a total distribution and later wishes to contribute again cannot reopen the same TSP account. Reemployment in a TSP-covered position would open a new account under the same or a new account number, subject to the standard rules for active participants.
Method 3: installment payments
Installment payments send a scheduled stream of payments from the account over time. The TSP offers three configuration modes: a fixed dollar amount per payment, a fixed number of years divided into equal amounts, or an amount recomputed each year based on IRS life-expectancy tables. Payment frequency can be monthly, quarterly, or annual.
The per-payment minimum in fixed-dollar mode is 25 dollars. The fixed-years mode and the life-expectancy mode do not carry a per-payment minimum in the same form; the payment amount is derived from the balance and the schedule. Modification of the schedule at any time is permitted, including switching modes.
Rollover eligibility of installment payments follows a specific IRS classification rule spelled out in TSP booklet tspbk26 on pages 10 and 11. Installments expected to last 10 years or more, or installments based on the participant’s life expectancy, are IRS “periodic payments” under IRC section 402(c)(4) and are not eligible for rollover.
Installments expected to last under 10 years and not based on life expectancy are eligible rollover distributions. They can be paid directly to a receiving IRA or eligible employer plan on a trustee-to-trustee basis.
The three-mode structure, the 25 dollar minimum, the withholding rules that follow classification, and the RMD interaction with installments are documented in more depth on our dedicated TSP installment payments mechanics reference.
Method 4: TSP life annuity purchase
The Federal Retirement Thrift Investment Board contracts a single outside insurance vendor to underwrite every TSP life annuity. The current vendor is Metropolitan Life Insurance Company (MetLife). There is only one annuity provider in the program; the participant cannot shop the annuity to a different insurer.
The minimum amount required to purchase a life annuity from the TSP is 3,500 dollars. This minimum applies separately to the traditional balance and the Roth balance. A participant with 2,000 dollars in Roth and 60,000 dollars in traditional cannot use the Roth portion for an annuity, because the pro rata slice would fall below 3,500 dollars.
The annuity menu is structured around three life-basis choices: single life, joint life with spouse, or joint life with another survivor. Each life basis then admits optional level or increasing payments and optional beneficiary features (cash refund or ten-year certain). Once purchased, the annuity is irreversible. Ownership of the money passes from the participant to the insurance vendor at the point of purchase.
The pricing index, the ten-year certain and cash-refund riders, the pro rata rule between traditional and Roth balances, and the spouse-consent requirements are documented in more depth on our dedicated TSP MetLife annuity purchase mechanics reference.
How the four methods sit next to each other
The figure below maps the five choices open to a separated participant, with the key parameter that distinguishes each one. Every value in the diagram is drawn from the tspbk25 and tspbk26 booklets cited at the bottom of this page.
The TSP Modernization Act and the rules it replaced
Before September 15, 2019, the TSP withdrawal rule set forced a separated participant into a single lifetime full-withdrawal election after at most one partial withdrawal. A participant who took one partial had to commit the remaining balance to installments, an annuity, or a lump sum, with no future changes. The framework predated the 1986 Federal Employees’ Retirement System Act evolution and stood largely unchanged for decades.
The TSP Modernization Act of 2017 (Public Law 115-84, effective September 15, 2019) replaced that framework. It removed the one-partial cap and uncapped in-service age-based withdrawals for participants at least age 59 and a half.
The Act also allowed installment payments to be started, stopped, or modified at any time. It allowed a separated participant to elect a life annuity at any time, not only as part of an original full-withdrawal election. The 30-day spacing rule between partial withdrawals is the only remaining frequency limit.
The historical shift and its documentation-side effects on Roth basis routing, in-service withdrawals, and installment modification are covered in the TSP Modernization Act partial withdrawals reference.
Rollovers are not a separate menu item on the tsp.gov withdrawal request. They are a routing choice inside the partial distribution, total distribution, or eligible-installment mechanics. The participant elects the destination on the same request that specifies the amount and the method.
The mechanics that decide whether a rollover leaves the TSP as a clean trustee-to-trustee transfer or as a cash distribution subject to the 20 percent federal withholding floor are documented in the direct versus indirect rollover mechanics reference. The full catalog of destinations the TSP accepts on a direct rollover, including traditional IRAs, Roth IRAs, qualified employer plans, and self-directed IRAs, is documented in the TSP rollover destinations reference.
The two references matter because a rollover error at the routing layer converts a non-taxable transfer into a taxable cash distribution with mandatory withholding. The withholding is calculated on the gross amount even when the participant intends the money to reach an IRA within 60 days.
One factual note on gold IRA rollover destinations
A Traditional IRA that holds IRS-approved precious metals under IRC section 408(m)(3) is one of the documented destinations available to a separated TSP participant electing a direct rollover on a partial distribution, a total distribution, or an eligible-installment payment. The 1099-R code on that rollover is G, and the 20 percent federal withholding floor does not apply. No cash reaches the participant.
Updated August 29, 2026.
Sources cited
- TSP: Withdrawals in retirement (post-separation distribution methods overview)
- TSP booklet: Distributions (tspbk25)
- TSP booklet: Withdrawing from your TSP account for separated and beneficiary participants (tspbk26)
- Cornell Legal Information Institute: 26 U.S. Code section 402 (eligible rollover distribution and periodic payment definitions)
- Cornell Legal Information Institute: 26 U.S. Code section 408 (individual retirement accounts, including 408(m)(3) IRS-approved metals)
- Cornell Legal Information Institute: 26 U.S. Code section 3405 (federal withholding on pensions, annuities, and certain other deferred income)
- Electronic Code of Federal Regulations: 5 CFR Part 1650 (Methods of withdrawing funds from the Thrift Savings Plan)