How to Make Your TSP Last in Retirement: 4 Factors Every Federal Employee Should Know

It might not be something you’ve ever said out loud, but are you more afraid of running out of money in retirement than you are of dying? 

It sounds dramatic, but statistically, 2 out of 3 Americans feel that exact same way. And after sitting across the table from 5 to 7 retirees every single day, I’ll tell you—it’s real. I hear the same concern over and over again: “Andrew, I just don’t want to outlive my savings.” 

And rightfully so. Nobody wants to retire, only to be forced back into the workforce later—not by choice, but because the money ran out. That’s a hard pill to swallow. 

So today, let’s look at the steps you can take to make sure your TSP lasts.  

Forget the financial noise for a second—the doomscrolling, the inflation headlines, the recession whisperers. What matters most isn’t the global economy—it’s your personal economy. And with the right strategy, your retirement can be exactly what you’ve worked so hard for it to be. 

1. Watch Your Withdrawal Rate Like a Hawk 

Now, a lot of folks will say, “Just take out 4% or 5% from your TSP every year and you’ll be fine.” But let’s hit pause and actually run through what that could look like…

Let’s take Amy, a 62-year-old federal employee with $500,000 in her TSP. She’s invested entirely in the C Fund and she’s withdrawing 5% annually. 

Now you’d think that with the market averaging 8% over the last two decades, Amy would be just fine. But here’s the catch: Amy runs out of money. 

How?

Those early down years in the market—right when she began taking withdrawals—derailed her entire plan. That’s the danger sequence of returns risk: when the timing of investment returns, especially early in retirement, has a major impact on how long your savings will last. And it’s why blindly sticking to a 4% or 5% rule without a strategy is like walking into a storm without an umbrella. 

And look, I’m not saying you can’t treat yourself. If you want to go on that Viking River Cruise you’ve been dreaming about, you should be able to. You worked for it. 

But what if the market’s down that year? Do you cancel your plans? Probably not. That’s why it’s critical to plan smarter. 

2. Stop Putting All Your TSP Eggs in One Basket 

Retirement doesn’t happen in a straight line.

You don’t wake up at 62 and magically have the same needs and lifestyle all the way through 92. Retirement actually unfolds in phases. 

In the first 10 years, you’ll likely spend more—because you still have your health, the energy, and hopefully the desire to explore the world a bit. That’s why at SWAN Capital, I’m a fan of what we call the 3 Bucket Strategy.

Let me explain:

• Bucket #1: Cash and short-term reserves 
• Bucket #2: Income for the next 5–10 years 
• Bucket #3: Long-term growth for 10+ years out 

This kind of segmentation helps prevent you from selling growth assets in a down market just to fund today’s retirement needs. It’s a way to think of your TSP and other savings like a team, not a solo player trying to carry all the weight. 

3. The G Fund Isn’t a Safety Net 

Now, here’s where I see a lot of folks trip up…

They get nervous—maybe the market’s down, or they’re getting closer to retirement—and they decide to move everything into the G Fund. 

Why? Because it “feels safe.” 

But here’s the thing: The G Fund typically earns around 2%. If you’re withdrawing 4% or 5% to live on, guess what you’re doing? 

You’re guaranteeing your TSP runs out early. 

And I get it—in theory, it sounds smart. But in reality, with inflation rising and the cost of everything going up, the G Fund just doesn’t keep pace. 

4. You Need More Than a Spreadsheet 

I love spreadsheets. I really do. If you’ve got one, send it to me—I’ll be the first to cheer you on. 

But retirement planning isn’t just about plugging numbers into Excel. 

Real retirement planning requires a professional financial plan, with Monte Carlo simulations that stress test your TSP through every possible scenario—bad markets, early death of a spouse, future tax hikes, inflation spikes—you name it. Because eyeballing it or using some online calculator isn’t enough. You need clarity and confidence, not guesswork. 

So here are four questions I always ask when I’m reviewing a retirement plan: 

1. When can you retire confidently—without running out of money? 
2. Have you over-saved or under-saved? What’s your probability of success? (Hint: you want it above 90%.) 
3. What’s your maximum spend? Maybe you want to spend more in the early years—great! Let’s test for it. 
4. What inflation rate is your plan using? If it’s only 2% or 3%, we need to talk. That’s not realistic for this decade. 

The Bottom Line 

Look, growing your TSP while you’re working is one thing. 

Withdrawing from it wisely during retirement? That’s a whole different ballgame. 

It’s not about timing the market. It’s not about finding the perfect fund. It’s about building a plan that helps your money last—not just for the next 5 years, but for the next 30. 

Because at the end of the day, it’s not just about making your TSP last. It’s about making your retirement dreams last. 

That’s our goal every day at SWAN Capital, where we sit down with federal employees just like you to create retirement plans that fit your individual goals and lifestyle.

🎬 If you haven’t already, be sure to watch our full video “How to Make Your TSP Last in Retirement” for a clear, visual walk-through of these four factors.

Then, when you’re ready to take the next step, schedule your No-Cost Consultation and receive comprehensive federal retirement report tailored to your goals.

COVERING OUR TAIL FEATHERS 

Welcome to Swan Capital, LLC (“SWAN”), your friendly neighborhood Registered Investment Adviser (“RIA”). Now, while we may have a fancy title, remember that our registration doesn’t guarantee we’re flying high above the rest. This communication hasn’t been blessed or verified by the United States Securities and Exchange Commission (SEC) or any state securities authority. At SWAN, we believe in giving you personalized investment advice as unique as a swan’s graceful glide. We work with clients in their own states, making sure to play by all the regulatory rules or find the right exceptions. But here’s the scoop: all investments come with risks—like a wild swim in the pond—so no investment strategy can promise profits or protect you from the occasional splashdown. Just remember, past performance is like a cozy old story; it might be nice to reminisce about, but it doesn’t promise what’s coming next. 

SWAN Capital, LLC is an independent firm and is not affiliated with, endorsed by, or sponsored by the Federal Employee Retirement System (FERS) or any government agency. 

Thanks for gliding along with us at SWAN! We’re here to help you soar to new financial heights while ensuring you can truly Sleep Well At Night!