TSP retirement allocation


Q: I retire April 30 and plan to start monthly payment withdrawals from my TSP immediately to supplement a 31-year LEO/CSRS pension. I will withdraw no more than 5 percent in order to maintain, and maybe even grow, my balance. What TSP allocation amounts do you recommend for retirees to keep a steady flow of income?

A: There is no single allocation that will magically support a steady income stream. The best method is to select the allocation that will most likely support your needs going forward, then monitor your progress and adjust the allocation when necessary to either reduce or increase the portfolio’s risk. This takes some careful analysis and ongoing attention. This is how pension funds are managed (when they’re managed prudently). By the way, taking no more than 5 percent of your portfolio’s value each year will not produce a steady stream of income, it will produce a varying stream.


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