Thrift Savings Plan (TSP) Annuity

A Thrift Savings Plan (TSP) annuity is a life annuity contract purchased using funds from a TSP account. The TSP offers single life annuity and joint life annuity options through MetLife, its sole annuity provider.

Thomas Brock, CFA, CPA, expert contributor to Annuity.org
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    Thomas J. Brock, CFA®, CPA

    Thomas J. Brock, CFA®, CPA

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  • Updated: January 17, 2023
  • 6 min read time
  • This page features 3 Cited Research Articles
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APA Brock, T. J. (2023, January 17). Thrift Savings Plan (TSP) Annuity. Annuity.org. Retrieved February 2, 2023, from https://www.annuity.org/annuities/types/tsp-annuity/

MLA Brock, Thomas J. "Thrift Savings Plan (TSP) Annuity." Annuity.org, 17 Jan 2023, https://www.annuity.org/annuities/types/tsp-annuity/.

Chicago Brock, Thomas J. "Thrift Savings Plan (TSP) Annuity." Annuity.org. Last modified January 17, 2023. https://www.annuity.org/annuities/types/tsp-annuity/.

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What Is a TSP Annuity?

A TSP annuity is a life annuity contract purchased using funds from your TSP account.

The standard transaction transfers your money to MetLife, the sole annuity provider for the TSP, in exchange for a guaranteed stream of monthly payments for the rest of your life. One of the common types of annuities, this standard transaction is known as a single life annuity.

A joint life annuity is also available. This option guarantees a monthly payment to you and a spouse (or someone you designate other than a spouse) for the rest of your lives. Since a joint life payment stream covers two people and is likely to last longer than a single life stream, the amount of the payment is typically lower.

What Is a Fixed Annuity?

What Happens to the Annuity When You Die?

With a TSP annuity, if you die with money left in your annuity, MetLife will keep the remaining funds.

However, in qualifying circumstances, there are two optional features that provide some value to beneficiaries: a cash refund feature and a 10-year certain feature. If you choose either of these options, the monthly annuity payments you receive will automatically be reduced.

With the cash refund feature, unused annuity funds are paid to your beneficiaries when you die. You can add this feature to a single life annuity or a joint life annuity.

With the 10-year certain feature, if you die before you have received annuity payments for a 10-year period, payments will continue to your beneficiaries for the remainder of the 10-year period. You can add this feature to a single life annuity, but it cannot be used with a joint life annuity.

Factors Affecting a TSP Annuity Payment

Beyond the choice of a single life annuity or a joint life arrangement, along with the optional choice of beneficiary features discussed above, various factors can impact the amount of your TSP annuity payment.

Factors that impact the amount of your TSP annuity payment include the following:
  • Your age when the annuity is purchased
  • The age of the joint annuitant (or co-owner of the annuity), if you choose a joint annuity
  • The amount of money used to purchase the annuity
  • The interest rate offered when you purchase the annuity*
  • Your selection of level payments or increasing payments; selecting increasing payments will reduce your initial payment amount but provide some protection against inflation

* The interest rate for annuities purchased  through the TSP in September 2022, for example, was 3.325%. Since 2002, the highest monthly rate was 5.750% (in August 2006), and the lowest was 1.209% (in July 2020).

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: January 17, 2023
Written By
Thomas Brock, CFA, CPA, expert contributor to Annuity.org
Thomas J. Brock, CFA®, CPA Expert Contributor
  • Chartered Financial Analyst (CFA®)
  • AVP, Treasury & Investments at a super-regional insurance carrier
  • Over 20 years of experience in the financial industry
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Edited By
Emily Miller, Managing Editor for Annuity.org
Emily Miller Managing Editor
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Financially Reviewed By
Rubina K. Hossain
Rubina K. Hossain, CFP® Certified Financial Planner™ Professional
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3 Cited Research Articles

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  1. Federal Retirement Thrift Investment Board. (n.d.). Home. Retrieved from https://www.frtib.gov/
  2. Thrift Savings Plan. (n.d.). About Us. Retrieved from https://www.tsp.gov/about-us/
  3. Thrift Savings Plan. (2022, September). Historical Annuity Rates. Retrieved from https://www.tsp.gov/living-in-retirement/historical-annuity-rates/