🚨 These TSP “Loopholes” Won’t Last Forever

Every few years, the government “modernizes” how the Thrift Savings Plan works.

Usually, that means tightening the reins—not loosening them.

That’s why some federal employees are quietly acting now—before the next wave of restrictions closes in.

Today, we’re pulling back the curtain on 4 TSP strategies that feel almost too flexible, too good, or too little-known to last.

None of these are illegal.

None are even shady.

But most federal employees have no idea they exist.

And if Congress needs money (spoiler: they do), these will be low-hanging fruit.

Let’s dig in.

1. The Roth-to-Roth IRA Timing Trick

You: Retire from federal service.

Your Roth TSP: Rolled directly into your Roth IRA.

✅ No tax hit
✅ Keeps your contributions + earnings intact
✅ Starts the 5-year Roth IRA clock—sooner

Why this matters: Unlike private-sector Roth 401(k)s, TSP's Roth portion behaves more cleanly when rolled over if timed right.

This is a huge advantage when planning for tax-free retirement income.

2. The Sneaky Withdrawal Sequence (Post-2019 Flexibility)

Before 2019, you had one shot at taking a partial withdrawal from TSP.

Now? You can:

✅ Take multiple withdrawals
✅ Start/stop monthly payments
✅ Even change the amount (or switch from monthly to quarterly)

This flexibility lets you test-drive income without committing to a full annuity or a rigid stream.

Why it's at risk: TSP modernization was a one-time deal—and future administrative headaches could force them to rein it in again.

3. Roth Conversions During the “Quiet Tax Years”

If you retire at 60 but don’t hit RMD age until 73, that’s up to 13 years of potential low taxable income.

During that time, you could:

✅ Convert traditional TSP funds to Roth IRAs
✅ Lock in today’s tax brackets
✅ Shrink future RMDs

This is one of the most powerful, underutilized tax strategies in the federal playbook.

Why it’s vulnerable: Congress has already debated limiting Roth conversions for high earners. If brackets rise or conversion rules shift, this becomes a missed opportunity.

4. The Double-Dipping Loophole

Retire under FERS. Then contract back in with your agency or a federal vendor.

Congratulations—you’re now earning a full paycheck plus your pension.

Some federal retirees structure this carefully and walk away with income that exceeds what they made pre-retirement.

Why this won’t last: It's a politically sensitive strategy. As budget pressure mounts, expect scrutiny or limits on post-retirement rehiring.

✅ Bottom Line:

These aren’t forever strategies. They’re now strategies.

If you’re within 5–10 years of retirement, planning around these flexibilities can add five or six figures to your retirement equation—if not more.

But once the loophole closes, it's closed for good.

Best,
Federal Wealth Retirement

📌 P.S. We’re tracking new legislative proposals and tax shifts that could hit one or more of these plays by 2026. If you'd like us to go deeper on any specific strategy (or review your window of opportunity), just hit reply.