If you have not designated someone, the TSP will follow the standard order of precedence for federal benefits. Image: William Potter/Shutterstock.com
By: John GrobeI’m sure that you remember earlier this year (May 30th) when Senator Joni Ernst (R-IA) said “We are all going to die.” Truer words were never spoken and, if we’re not financially prepared, our beneficiaries will be in a bad way when it comes to receiving the benefits to which they are entitled.
How can you make it easier for your loved ones to receive what they are due from the Thrift Savings Plan? First, and most importantly, you can be sure that you have designated a beneficiary for your TSP account. Check your account at the TSP website to see if you have designated a beneficiary and whom that beneficiary is. During the TSP’s transition to a new service provider in 2022, many beneficiaries who had been listed on the old form TSP-3 were not transferred to the new service provider. If you haven’t checked who your beneficiary is since the middle of 2022, it is imperative that you do so now.
What happens to your money?
When you die, the money in your TSP will go to the person you designated as your beneficiary. If you are unsure as to whom your beneficiary is, you can check your TSP account to find out.
What if you didn’t designate anyone as your beneficiary, or the person (or persons) you designated pre-deceased you?
The TSP will follow the standard order of precedence for federal benefits, which is:
- Surviving spouse;
- Child or children in equal shares (this will not include stepchildren unless they have been formally adopted);
- Parents;
- Executor or administrator of your estate;
- Next of kin as determined by the law of intestacy in the state that was your legal residence at the time of your death.
The TSP will not follow any wishes you express in a will or a trust; they will only follow your designation of beneficiary or the standard order of precedence. They will also resolve any court orders and outstanding loans before making any beneficiary payments. Expect 30 to 60 days for the Thrift Board to make any payments to beneficiaries.
What your beneficiary can do with your TSP account depends on their status
If your beneficiary is:
- Your federally employed or retired spouse, he/she may roll your TSP account into his/hers, elect an inherited IRA or take the money out.
- Your non-federally employed or retired spouse, he/she may take ownership of your TSP account, elect an inherited IRA, or take the money out. If they elect to take ownership of your account, the TSP will create a beneficiary participant account for them. The initial allocation in a beneficiary participant account is in the age appropriate L fund.
- A non-spouse may elect an inherited IRA or take the money out. The SECURE Act has limited the “stretch IRA” for almost all non-spouse beneficiaries who now have to totally deplete the account within ten years. In addition, a non-spousal beneficiary might have to take required minimum distributions from your account during the ten-year period.
Note that, when your spousal beneficiary dies, the money left in their beneficiary participant account cannot be passed on to another beneficiary; neither can it be rolled over into another tax deferred account. This might argue for your beneficiary to roll it into an IRA of their own, where they can pass on the balance to a beneficiary of their own choosing.
If a TSP participant dies while still actively employed
If an account holder dies while still in federal service, the employing agency or armed service notifies the TSP. If, at the time of their death, the participant was separated from federal service or was a beneficiary themselves (by means of a beneficiary participant account), the participant’s family or representative will have to notify the Thrift Savings Plan.
To notify the TSP, call the ThriftLine Service Canter at 877-968-3778 and have the following information available.
- Full legal name
- Date of death
- Date of birth
- Mailing address
- Marital status at time of death
- If married, the surviving spouse’s name
- Last 4 of the SSN (not required, but helpful)
A certified copy of the death certificate will need to be submitted. The death certificate must include an official seal, date of death, and cause of death.
If you prefer to send the certificate and the required information by snail mail, it can be send to:
TSP Death Benefits
ThriftLine Service Center
C/O Broadridge Processing
PO Box 1600
Newark, NJ 07101-1600
If you want to send the information by overnight delivery, the address changes to:
2 Gateway Center
283-299 Market St. 17th floor
Newark, NJ 07102
Expect it to take 30 to 45 days for the TSP to process a death benefits claim once they have verified the participant’s information and identified beneficiaries. The TSP has a booklet about death benefits https://www.tsp.gov/publications/tspbk31.pdf
John Grobe is a retired federal employee and retired retirement educator with over 30 years of experience in helping federal employees understand their retirement.
Key Bills Advancing, but No Path to Avoid Shutdown Apparent
TSP Adds Detail to Upcoming Roth Conversion Feature
White House to Issue Rules on RIF, Disciplinary Policy Changes
See also,
Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025
The Best Ages for Federal Employees to Retire
Alternative Federal Retirement Options; With Chart
Primer: Early out, buyout, reduction in force (RIF)
Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process
FERS Retirement Guide 2025 – Your Roadmap to Maximizing Federal Retirement Benefits
