Today's content comes directly from Brian O'Neill’s recent blog post Top 10 TSP Quirks You Need to Know. Brian is a fellow Military Financial Advisor Association member , former Air Force fighter pilot, and Certified Financial Planner who writes a great weekly blog with a fighter pilot twist. Thanks, Brian.

If you’ve ever compared the Thrift Savings Plan (TSP) to a civilian 401(k), you probably noticed the TSP has quite a few quirks:

1. Minimum balance: As long as you leave at least $200 in your TSP when you seperate from service, you can keep your TSP account open. This is great because you never know when a change in employment or the tax law will make it advantageous to roll money into the TSP.

2. Accepts rollovers: Except for a Roth IRA dollars, you can roll a Traditional IRA, and most other employer plan (e.g., 401(k)) funds into the TSP. This can be great for simplifying your roster of retirement accounts.
3. Three Withdrawal options after separation:
Fixed or life-expectancy-based installment payments. For installments of less than 10 years, you can rollover the distributions to an IRA. Single withdrawal: The minimum is $1,000 and you can only do one every 30 days. Purchase an annuity. This locks in a fixed stream of payments for life, but you forfeit any right to leave the annuity balance to your heirs.

4. Roth or Traditional withdrawals: You can choose Roth, Traditional or pro-rata withdrawals. If you have contributions from a combat zone, your contribution is not taxable but the earnings are. Withdrawals from your Traditional balance will always be pro-rata from pre-tax and after-tax dollars.

5. Processing delays. Along with the military and civil service human resource bureaucracy delays, the TSP can be pretty slow processing any request. Plan ahead, it’s not an ATM.

6. Spouse rights. If you choose to receive your TSP as a separately-purchased annuity, your spouse will need to consent to anything other than a 50% survivorship feature.

7. Death Treatment: Your balance will go to your beneficiaries on file with TSP, and NOT according to your will. And you must use form TSP-3 to change the d default beneficiaries. A surviviing spouse's TSP account is automatically invested in an age-determined Lifecycle Fund. A non-spouse beneficiary can't keep the TSP account and will need to receive the funds in an Inherited IRA. If your beneficiary then dies, the TSP will pay the balance directly to that beneficiary’s beneficiary allot once, potentially creating a “tax bomb.” If you inherit a TSP account, roll it to an Inherited IRA so a successor beneficiary keeps the tax-advantaged status.

8. The G-Fund. The G-Fund invests in special government bonds that its guaranteed to never lose principal value. But the G-Fund is usually the lowest performer of the 5 core TSP funds. It can make sense as part of a portfolio, but usually is NOT all.

9. Withdrawals are pro-rata from all funds. You can’t take a distribution from only the G-Fund or C-Fund, for example. A withdrawal is pro-rata across all them. For a work around after your withdrawal comes out, log into TSP and rebalance your funds to the allocation you want to keep.

10. Roth RMDs. A Roth IRA does not have a Required Minimum Distribution (RMD). Traditional IRAs, 401(k)s, and the both Roth and Traditional TSP all require you to start taking RMD every year starting age 72. Evaluate moving of Roth TSP dollars into a Roth IRA prior to 72.