The article we published on Survivor’s Benefits  stated that “Upon your death, the funds in your TSP account cannot remain in the TSP. Your account will have to be distributed to the beneficiary(ies) you indicate on Form TSP-3, Designation of Beneficiary.” This information is correct for non-spouse beneficiaries.
When a spouse is determined to be a beneficiary of part or all of a civilian or uniformed services account, the TSP will establish a beneficiary participant account in the spouse’s name if the spouse’s inherited share is $200 or more. The entire balance of the beneficiary participant account will be invested in the Government Securities Investment (G) Fund until the spouse makes a different investment choice or chooses to withdraw the money. The money in a beneficiary participant account is not subject to Federal income tax withholding until it is withdrawn.
This is an important distinction for widows and widowers and the G fund is a safe haven for your account considering that it is the only fund guaranteed never to decrease in value. I updated this information on our blog and on our website today. I suggest downloading the TSP Death Benefits Brochur e and keep it with your retirement and or estate planning paperwork. You should also download their pamphlet titled “Important Tax Information About Thrift Savings Plan Death Benefit Payments .” The TSP suggests that, “This information may be helpful in developing instructions so that your spouse, executor, or other person knows what to expect.” I downloaded both today and added
If you don’t submit a TSP-3 Designation of Beneficiary form  the TSP will use the order of precedence required by law:
- To your spouse;
- If none, to your child or children equally, and to descendants of deceased children by representation;
- If none, to your parents equally or to the surviving parent
Caution – By law, the TSP must pay your properly designated beneficiary(ies) under all circumstances. For example, if you designate your spouse as a beneficiary, that spouse will still be entitled to death benefits if you separate or divorce from that spouse or remarry and do not change your beneficiary designation. This is true even if the spouse you designated gave up all rights to your TSP account(s). Consequently, if your life situation changes, or if any of your beneficiaries change their addresses or other identifying information, you may want to file a new Designation of Beneficiary form that cancels or updates your current beneficiary designation. A properly completed and submitted Designation of Beneficiary form will automatically cancel or update any previous Designation of Beneficiary forms for your TSP account.
There are many things to consider that if not handled properly could negatively impact your intended heirs. Review this information and include a copy of this article with your estate plans.
- Request a FREE Retirement Benefits Summary & Analysis . A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.
- Retirement Planning Guide 
- Master Retiree Contact List  (Important contact numbers and information)
- Survivor’s Guide 
- Estate Planning Guide (An 11 part series that will help readers prepare for retirement, understand basic estate planning techniques, and compile their personal “Survivor’s Guide” binder.)
Visit our other informative sites
- Federal Government Jobs & Career Center 
- FREE Federal Employee’s Retirement Planning Guide 
- Federal Employee’s Career Development & IDP Center 
The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
Last 5 posts by Dennis Damp
- Seeds of Change – Making a Difference  - September 18th, 2021
- Federal Employees’ Group Life Insurance (FEGLI) Premium Changes  - September 12th, 2021
- Deciding When To Retire - A 7-Step Guide  - September 3rd, 2021
- 2022 Leave Chart & Schedule Tracker Now Available  - August 18th, 2021
- Annuity Expectations – Before and After  - August 6th, 2021
- Prescription Savings Cards & Coupons  - July 22nd, 2021
- Unexpected Health Care Costs  - July 9th, 2021
- Maximize Retirement Income & TSP Changes  - June 25th, 2021
- Critical Retirement Decisions - Are You Prepared?  - June 11th, 2021
- Patient advocates / The Why and Wherefore of patient advocacy  - May 29th, 2021
- Earn 3.54% with Series I Savings Bonds – Tax Deferred Income  - May 16th, 2021
- What is Medicare’s IRMAA Premium Adjustment?  - May 7th, 2021