Updated July 28, 2026. Quick answer: Tax treatment broadly parallels an inherited IRA, but the plan document governs alongside the code and can be markedly more restrictive. The TSP in particular has its own rules that surprise beneficiaries.
Two rulebooks again
As with an inherited 401(k), the tax code sets the outer limit and the plan sets what is actually available. A plan may require faster distribution than the code demands.
The TSP is its own case
Federal employees’ TSP accounts have specific beneficiary rules and historically limited flexibility compared with an IRA, and a non-spouse beneficiary account can be subject to a forced timeline. Confirm the current TSP beneficiary rules directly with the TSP before assuming IRA-style options are available — this page does not restate rules that have changed more than once.
The usual first move
A direct trustee-to-trustee transfer to an inherited IRA generally replaces the plan’s constraints with the code’s. As with a 401(k), it must be a direct transfer — a cheque to you is usually a taxable distribution with no way back.
The exception is where the plan holds something the IRA cannot: appreciated employer securities, where transferring out forfeits the NUA election permanently.
Sources
Final regulations on required minimum distributions, published 19 July 2024; SECURE Act (2019) and SECURE 2.0 (2022); IRC §401(a)(9); IRC §2518 (qualified disclaimers); IRC §408(d)(8) (qualified charitable distributions). Cross-checked July 2026 against professional analyses from Kitces, Grant Thornton, Ascensus, Charles Schwab and Kiplinger. Where a deadline or dollar figure is indexed or was not read in primary source for this page, the text says so rather than asserting it.
This states what the cited authority says. It is not tax advice, and inherited account deadlines turn on facts about the decedent and the plan that no page can verify for you.