A Thrift Savings Plan (TSP) participant is strongly advised to designate a TSP account beneficiary. By designating a TSP account beneficiary, a TSP participant has control and flexibility who will receive the TSP participant’s TSP account when the TSP participant dies. Up to twenty beneficiaries can be designated, including: (1) Individuals; (2) A revocable living trust; (3) The TSP participant’s estate; (4) A corporation; or (5) Another legal entity. TSP participants are also advised to keep their beneficiary designations up-to-date and to make any necessary changes due to life events. For example, the death of a previously designated beneficiary or divorce from a designated beneficiary spouse.
When a spouse is named as a TSP beneficiary, upon the death of the TSP participant, the TSP will automatically establish a TSP beneficiary participant account in the spouse’s name. The money in the beneficiary participant account will be invested just as it was in the TSP participant’s account, except for money in the mutual fund window. Money invested in the mutual fund window will be reinvested in the beneficiary account in the same percentages the deceased TSP participant invested in the C, S, I, F and G funds. Beneficiary participants are required to take required minimum distributions (RMDs). Note that RMDs from beneficiary participant accounts apply only to the traditional TSP account.
The date on which a surviving spouse must begin receiving RMDs depends on whether the deceased spouse (the deceased TSP participant) died before or after his or her “required beginning date.” Table 1 below is used to find the deceased spouse’s “requiring beginning date”. Note that Table 1 also shows the deceased spouse’s “specific age” which the surviving spouse will need to know to determine whether the deceased spouse died before the required beginning date.
Table 1. TSP RMD Specific Age and Required Beginning Date
| TSP Participant’s Date of Birth |
Specific Age |
Employment Status as of 12/31/24 |
Required Beginning Date |
|
Before July 1, 1949 |
70.5 (has already passed) | Separated | Has already passed |
|
Active |
April 1 of the year after separation |
||
| July 1, 1949 – December 31, 1950 | 72 (has already passed) | Separated | Has already passed |
| Active | April 1 of the year after separation | ||
| January 1, 1951 – December 31, 1951 | 73 | Separated | Has already passed |
| Active | April 1 of the year after separation | ||
| January 1, 1952 – December 31, 1959 | 73 | Separated | April 1 of the year after participant is both separated and at least 73 |
| Active | |||
| After December 31, 1959 | 75 | Separated | April 1 of the year after participant is both separated and at least 75 |
| Active |
TSP Participant’s Date of Death Is Before Required Beginning Date
Table 2 below presents the three possible scenarios for the TSP beneficiary participant’s RMD category and the deadline for which the beneficiary participant must begin receiving RMDs.
Table 2. Beneficiary Participant RMD Deadlines When Spouse (TSP participant) Dies Before Required Beginning Date
| If, at the time of death...... | Beneficiary participant must begin receiving RMDs by...... |
| Spouse would not have reached the specific age before the end of the year. | December 31 of the year the spouse would have reached the TSP RMD specific age. |
| Spouse reached the applicable age or would have reached it before April 1 of the following year and had already separated from federal service. | December 31 of the year following the year of the spouse’s death. It makes no difference if the spouse had already satisfied the RMD for the year he or she reached the specific age prior to the required beginning date. |
| Spouse had reached the applicable age and had not separated from federal service. | December 31 of the year following the year of the spouse’s death. |
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The following examples illustrate the calculation of RMDs for beneficiary participants. The first example illustrates the deceased spouse’s RMD calculation when the deceased spouse died after reaching his or her required beginning date. The other three examples illustrate the beneficiary participant’s (the surviving spouse’s) RMD calculations when the deceased spouse died before his or her required beginning date.
Example 1. Paul, age 78, is married to Elizabeth, age 76, and was a federal retiree with a traditional TSP account. He died suddenly on March 2, 2025. At the time of his death Paul had not taken his 2025 TSP RMD. Elizabeth (Paul’s only TSP beneficiary) must take Paul’s TSP RMD for the year 2025 no later than December 31,2025. She calculates Paul’s 2025 TSP RMD as follows:
December 31,2024 traditional TSP account balance: $635,500
Life expectancy factor (IRS Uniform Lifetable Table) for a 78-year-old: 22.0
$635,500/22.0 = $28,886.36
Elizabeth must request by December 31,2025 a traditional TSP RMD of at least $28,886.36.
Starting in 2026 and every year thereafter, Elizabeth must take a TSP beneficiary participant RMD based on her age and prior-year end TSP traditional account balance, and the IRS Single Life Expectancy Table.
For the year 2026 when Elizabeth will be 77, suppose the traditional TSP account balance as of December 31,2025 is $610,000.
The IRS Single Life Expectancy Table life expectancy factor for a 77-year-old is 13.3:
$610,000/13.3 = $45,864.66
For the year 2026, Elizabeth must request a TSP beneficiary participant RMD of $45,864.66.
Example 2. Sheila, age 68 and married to Nolan, age 70, died in May 2025. Sheila’s TSP RMD specific age is age 73. Nolan, Sheila’s only TSP beneficiary, must take his first TSP beneficiary account RMD by December 31 of the year Sheila would have become age 73 (2030). In the year 2030, Nolan will be age 75. To calculate the 2030 TSP beneficiary account RMD, Nolan will need the following information:
Traditional TSP account balance as of December 31,2029 divided by the
Life expectancy factor (IRS Single Life Expectancy Table) for a 75-year-old (equals 14.8)
Nolan will calculate the annual amount of his beneficiary participant RMD the same way every subsequent year.
Example 3. Carl retired from federal service on September 30,2024 at the age of 72. Carl contributed both to the traditional TSP account and to the Roth TSP account. Carl is married to Jennifer who is also aged 72. Carl died suddenly in May 2025, a few months before his 73rd birthday. Jennifer is the sole beneficiary of Carl’s TSP account. Carl had not taken his first year traditional TSP RMD at the time of his death. Jennifer, as the beneficiary participant, must take her first TSP beneficiary participant RMD by December 31,2026 when she will be age 74. Jennifer’s first year TSP beneficiary participant RMD will be calculated as follows:
Traditional TSP account balance as of December 31,2025 divided by the
Life expectancy factor (IRS Single Life Expectancy Table) for a 74-year-old (equals 15.6)
Jennifer will calculate her future year TSP beneficiary participant RMDs in a similar fashion.
Example 4. Veronica, age 74, was a federal employee who died in June 2025. At the time of her death, Veronica was married to Vince, age 76 and the only beneficiary of Veronica’s traditional TSP account. Although Veronica had reached her TSP RMD specific age, she had not separated from federal service and therefore did not have to take a traditional TSP RMD. But Vince must take his first TSP beneficiary participant RMD by December 31, 2026. The first year TSP beneficiary participant RMD will be calculated as follows:
Traditional TSP account balance as of December 31,2025 divided by the
Life expectancy factor (IRS Single Life expectancy Table) for a 77-year-old (equals 13.3).
Vince will calculate his future year TSP beneficiary participant RMDs in a similar fashion.
*Hypothetical examples provided for illustrative purposes only*
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.