The Thrift Savings Plan is a good accumulation tool but has some issues for retirees. There are a few things that a federal retiree can do with their IRA but not TSP.

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As a Federal Employees Retirement System (FERS) retiree, you have the benefit of the Thrift Savings Plan (TSP) as part of your retirement package. The TSP is a valuable asset that can help provide financial security in your retirement years. However, there are certain restrictions and limitations on what you can do with your TSP as a FERS retiree. Here are four things FERS retirees can’t do with their TSP:

1. Take out a loan: Unlike active federal employees who are eligible to take out a loan from their TSP account, FERS retirees are not allowed to do so. This means that once you retire, you cannot borrow money from your TSP account, even if you face a financial emergency or are in need of funds for personal reasons.

2. Make additional contributions: As a FERS retiree, you are no longer eligible to make contributions to your TSP account. This means that you cannot continue to grow your TSP balance through additional contributions once you have retired. However, you can still manage and make withdrawals from your existing TSP account.

3. Roll funds into TSP from other retirement accounts: FERS retirees are not allowed to roll funds from other retirement accounts, such as 401(k) or IRA accounts, into their TSP. This limitation prevents retirees from consolidating their retirement savings into one account and may impact their ability to maximize their investment options and portfolio diversification.

4. Transfer TSP to former employer’s plan: FERS retirees are not permitted to transfer their TSP funds to their former employer’s retirement plan. This restriction eliminates the possibility of consolidating retirement savings from different sources and may limit retirees’ ability to take advantage of different investment options and fee structures offered by their former employer’s plan.

While these limitations may restrict some of the flexibility and options available to FERS retirees with their TSP, it’s important to note that there are still various ways to manage and utilize your TSP account to support your retirement goals. For example, retirees can access their TSP savings through periodic payments, annuities, or lump-sum withdrawals, and they can also invest their TSP funds in a range of investment options to generate income in retirement.

Overall, understanding the restrictions on what FERS retirees can’t do with TSP is crucial in planning for retirement and making informed decisions about how to manage your TSP account. It’s recommended to consult with a financial advisor or retirement specialist to develop a comprehensive retirement plan that incorporates your TSP and other retirement assets to ensure a financially secure and comfortable retirement.