Updated August 6, 2026. Quick answer: most people meet the TSP annuity as one line on a withdrawal menu. In the regulation it is not one line on a menu. If you are married and covered by FERS or the uniformed services, a joint and survivor annuity on your entire account balance is what your spouse is entitled to by default — every other way of taking the money is the deviation, and the deviation needs their signature. It is also, in three separate places, a decision you cannot take back.
It is the default, not the option
Under §1650.61(c), the spouse of a FERS or uniformed services participant is entitled to “a joint and survivor annuity with a 50 percent survivor benefit, level payments, and no cash refund based on the participant’s entire account balance when the participant elects a total post-employment distribution”.
Read that again with the emphasis where the regulation puts it: entire account balance. Not the portion you were thinking of annuitizing. The default shape covers all of it.
Waiving it takes the spouse’s written consent — the record keeper needs “a properly completed distribution request, signed by his or her spouse” (§1650.61(c)(4)). And the waiver is a one-way door of its own: once the record keeper has it, “the spouse’s consent and waiver is irrevocable for the applicable distribution or installment payment change” (§1650.61(c)(5)).
So the household conversation is not should we buy an annuity. It is should we give up the one the rules already handed us. Those are different conversations and they start from different places. Which spousal right attaches to which TSP transaction sets out the rest of the pattern.
Three separate points of no return
1. The waiver. Irrevocable once received, per §1650.61(c)(5), above.
2. The annuity itself. §1650.14 is blunt: “Once an annuity has been purchased, the type of annuity, the annuity features, and the identity of the joint annuitant cannot be changed, and the annuity cannot be terminated.” Not adjusted for a divorce, not switched to a different survivor, not unwound because rates moved.
3. The money leaving. §1650.17(b): “A post-employment distribution election cannot be changed or cancelled after the withdrawal request has been processed. Consequently, funds disbursed cannot be returned to the TSP.” A request can be cancelled only if the cancellation arrives before the record keeper processes it — requests entered by noon Eastern are ordinarily processed that night.
The distinction matters more than it looks. An installment series can be changed at any time — amount, frequency, withholding, destination (§1650.17(c)). An annuity cannot be changed at all. Two withdrawal choices that sit next to each other on the same form have opposite reversibility. The withdrawal menu in full.
The money stops being TSP money
The TSP does not pay the annuity. Under 5 U.S.C. §8434(b) the Executive Director “shall expend the balance in the annuitant’s account to purchase an annuity contract from any entity which, in the normal course of its business, sells and provides annuities” — an outside insurer, bound by “terms and conditions as the Executive Director requires for the protection of the annuitant” and required to furnish “a bond or proof of financial responsibility”.
After the purchase you are a contract holder of an insurance company, not a TSP participant with a balance. That is what makes the low TSP expenses irrelevant to the decision from that day forward, and it is why the keep-or-roll question is a different question with a different clock.
What the regulation actually offers
The features, as §1650.14 defines them — facts, not a ranking:
- Minimum: “A participant cannot elect to purchase an annuity contract with less than $3,500.”
- Single life, level payments — “monthly payments to the participant as long as the participant lives”, constant in amount.
- Joint life with spouse, and joint life with another person — a former spouse, or someone with an insurable interest in the participant.
- Increasing payments — “increased once each year on the anniversary of the first payment by a fixed rate of 2 percent”.
- Cash refund — any unpaid balance goes to the beneficiaries if the participant dies before it is paid out.
- Ten-year certain — if the participant dies before “120 payments” have been made, payments continue to the beneficiaries until 120 have been made.
The first payment arrives “approximately 30 days after the TSP record keeper purchases the annuity”.
Two percent is a number, not a measurement
The increasing-payment option is the one most often misread, because federal households are used to increases that track prices. This one does not. The rate is fixed at 2 percent in the regulation itself. It does not consult an index, and it does not catch up.
In any year prices rise faster than 2 percent, the payment loses ground in real terms permanently — the base it compounds from is already behind. In any year prices rise slower, it gains. It is an escalator with a number written on it, and the number was chosen once. Whether that trade is worth its lower starting payment is a pricing question the regulation does not answer: §1650.14 defines the features, and the vendor’s rates decide what each one costs you at purchase. We have not published those rates and do not model them here.
The same decision outside the TSP
The structure of the choice — a guaranteed stream against a balance you control — is not federal-specific, and the arithmetic pages that already exist apply cleanly: the break-even between a lump sum and a monthly annuity, and what a younger spouse does to a survivor election. Federal households making this call usually have a second, separate survivor decision running alongside it: the FERS survivor benefit election. They are independent instruments and can be answered differently.
The order of operations also matters if a divorce is anywhere in the picture — a court order divides the account before any of this, and the TSP takes a different instrument than a QDRO. And if you are still carrying a loan, the loan balance settles first.
If you want a second opinion on this one
This is a decision with an unusually sharp asymmetry: the reversible choices stay reversible forever, and this one closes permanently on the day it is processed. That is a fair reason to have someone check the arithmetic against the rest of your household’s income before you sign, particularly if a survivor is depending on it.
Go in with three things: the survivor income you would need if the participant died first, the FERS survivor election you have already made, and the fact that the default here is joint and survivor on the whole balance. If the first meeting is about market outlook rather than those, you are in the wrong room. What advice should cost is worth knowing first.
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Sources
5 C.F.R. §1650.14 (annuities), §1650.17 (changes and cancellation), and §1650.61(c) (the spousal joint and survivor entitlement and its waiver), with 5 U.S.C. §8434 (methods of payment; purchase from an annuity vendor), all read at the Legal Information Institute on 2026-08-06. Quotations are from the regulation and statute text. We cite the law rather than the TSP’s booklets because tsp.gov did not serve us, and because the law is the operative authority in any event.
Honest gap. This page describes the instrument the regulations define. It does not cover the vendor’s current payout rates or the interest-rate index they are set from, the tax treatment of annuity payments once they begin, how the annuity interacts with required minimum distributions, or the procedure for a spousal-consent exception. None of those were read here, and the pricing question — what each feature costs in starting income — is the one this page most conspicuously does not answer.
See methodology and corrections. General information about published law, not financial or legal advice.