The annual open season in which TSP participants can change the amount of their monthly payments is upon us. Those who are currently receiving monthly payments from their TSP accounts received form TSP-73, Change in Monthly Payment Amount last month via snail mail. If they want to change their payment amount, they need to complete the form, have it notarized and return it so that the TSP receives it before December 15th. If they do not want to change the amount of their payments, they don’t need to do anything.
You can only change the amount of your monthly payments once a year. Though the Thrift Board announced that they plan to allow more flexible withdrawal options back in July of 2015, they haven’t taken any action on that front, other than reiterating their intention to do so in their recently released strategic plan. Until around fifteen years ago, it was even more restrictive; you could not change the amount of your monthly payments at all. It is expected that, once the TSP acts in this area, participants will be able to change payment amounts more frequently than once a year.
Those who are receiving monthly payments based on their life expectancy and change to monthly payments of a fixed dollar amount will not be able to return to the life expectancy methodology at a later date.
What if you want to make other changes in your monthly payments? Well, the TSP has another form for that. Form TSP-78, Monthly Payments Maintenance, can be used to start, change or stop direct deposit; stop transfer to a financial institution; change the amount of withholding for federal income tax and transfer (rollover) your balance to another tax advantaged account.
As with all forms, make sure that you carefully read the instructions prior to filling them in and submitting them. The TSP will go ahead and process them the way you filled them out and, once processed, they cannot be undone.
Remember that if you have both traditional and Roth balances within your TSP account, all withdrawals, transfers, etc. must be proportional between the two separate balances.