After decades of federal service, your retirement deserves more than vague assumptions and best guesses—it deserves a well-crafted, proactive plan.

Whether you’re a FBI agent, a Letter Carrier or a othropedaic surgeon at the VA, the 2 years leading up to retirement are crucial. The right moves now can set you up for a retirement that’s financially secure, flexible, and fulfilling.

Here are the three Mission critical ingredients every federal employee needs for a confident transition into retirement:

#1  Strategic Retirement Withdrawal Plan

Where will your paycheck come from when your agency paycheck stops?

For many federal employees, retirement income will come from a mix of sources—your FERS Pension, Social Security, TSP, personal savings, and maybe even part-time work or consulting. But knowing how and when to tap these sources is just as important as having them.

A strong withdrawal plan:

• Identifies your essential expenses (housing, healthcare, groceries) and discretionary goals (travel, hobbies, family support).
• Matches those needs with your income sources: FERS pension, Social Security, TSP accounts, IRAs, taxable investments, annuities, and more.
• Establishes a withdrawal rate based on your age, goals, and market conditions.
• Plans for big-ticket expenses like home repairs, vehicles, weddings, or medical care.
• Strategically prepares for Required Minimum Distributions (RMDs) starting at age 73.
• Stress-tests your plan against different market scenarios so you don’t outlive your savings.

It’s not just about pulling money out—it’s about pulling it out strategically to create a reliable, tax-smart retirement paycheck that lasts throughout your entire retirement journey.

And importantly, your withdrawal strategy must allow room for your savings to keep growing to outpace inflation while still securing against sequence-of-returns risk—the risk of poor market returns early in retirement.

#2 A TSP or IRA Portfolio Built for Stability, Growth, and Flexibility

Your investments should serve your plan, not the other way around.

We use a bucket strategy to balance income needs, market volatility, and long-term growth. It divides your retirement savings into three time-based segments:

• Short-Term Bucket (1–3 years): Cash and stable investments designed to cover your immediate income needs without worry.
• Mid-Term Bucket (3–7 years): A balanced mix of income-generating investments to refill the short-term bucket over time.
• Long-Term Bucket (7+ years): Growth-focused investments that aim to outpace inflation and rebuild wealth for the later stages of retirement.

This structure may prevent you from needing to sell investments at a loss during market downturns while ensuring part of your portfolio remains positioned for long-term growth.

Important Note About TSP Withdrawals*

If you plan to keep money in the TSP during retirement, it’s critical to understand a key limitation:
The TSP does not allow selective withdrawals from individual investments.

Every TSP withdrawal pulls proportionally across all your TSP funds (G Fund, C Fund, S Fund, I Fund, F Fund) based on your current allocation.
You can’t just draw from the G Fund (cash equivalent) during market downturns and leave your stock funds untouched.

For many retirees, this inflexibility is a major reason to roll part or all of their TSP into a more flexible IRA, where true bucket strategies and selective withdrawals can be implemented properly.

We also regularly review and rebalance each bucket as your needs, goals, and market conditions evolve, ensuring your retirement portfolio stays aligned with your mission.

#3 A Tax-Efficient Withdrawal Strategy 

It’s not what you make—it’s what you keep.

Without thoughtful tax planning, you could unintentionally:

• Jump into higher tax brackets
• Trigger IRMAA surcharges (higher Medicare premiums)
• Create taxable Social Security income unnecessarily
• Face bigger RMDs and tax bills down the line

A smart tax distribution plan includes:

• Managing your annual taxable income to smooth tax rates over time
• Timing Roth IRA conversions during low-income years (e.g., post-retirement, pre-RMD years)
• Harvesting capital gains (or losses) strategically
• Coordinating Qualified Charitable Distributions (QCDs) if you plan to give to charity
• Keeping an eye on potential tax law changes that could impact retirement planning

The goal isn’t just minimizing taxes today—it’s minimizing taxes over your entire retirement, leaving you with more flexibility, more security, and more options in the future.

The TSP and OPM Won’t Build This Plan for You

It’s important to be clear:

TSP administrators and OPM retirement counselors won’t create a personalized retirement income plan for you.

They can explain your benefits.
They can process your forms.
But they won’t design a custom withdrawal strategy, a retirement tax plan, or an investment bucketing system tailored to your future.

If you don’t proactively build this structure yourself—or partner with someone who knows the system inside and out—you risk making costly mistakes at one of the most important times of your life.

Creating the 3 Mission Critical Ingredients for a Successful FERS Retirement Plan

Having guided hundreds of federal officers through successful transitions, I’ve developed a process specifically designed for your situation.

At Mission Point Planning and Retirement, we specialize in helping Federal Law Enforcement Officers develop a personalized, tax-efficient retirement plan.

📅 Schedule a consultation today to make sure you’re maximizing your benefits and creating the 3 Mission Critical Ingredients for a Successful Federal Retirement Plan.

With over 21 years of experience as a financial planner, author and educator, Anthony Bucci helps Federal Law Enforcement prepare for retirement and  ‘cut through the noise’ and make decisions free from opinion, emotion and conjecture.

Tony is also a frequent contributor on FedSmith and you can read more of Tony’s wisdom for Federal Employees HERE.

* https://www.tsp.gov/withdrawals-in-retirement/

Disclaimer: This material is for informational purposes only and should not be considered tax or financial advice. Consult with a qualified tax professional or financial advisor for guidance on your specific situation.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Investing involves risks including possible loss of principal.

Asset allocation does not ensure a profit or protect against a loss

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future

At Mission Point Planning and Retirement, we specialize in helping Federal Law Enforcement Officers develop a personalized, tax-efficient retirement plan.

📅 Schedule a consultation today to make sure you’re maximizing your benefits and avoiding unnecessary taxes

With over 19 years of experience as a financial planner, author and educator, Anthony Bucci helps Federal Law Enforcement prepare for retirement and  ‘cut through the noise’ and make decisions free from opinion, emotion and conjecture.

Tony is also a frequent contributor on FedSmith and you can read more of Tony’s wisdom for Federal Employees HERE.