Can I withdraw money from my TSP?

If you are 591/2 or older, you can make withdrawals from your TSP account while you are still employed. This is called an “age-based withdrawal” or “591/2 withdrawal.” You must pay income tax on the taxable portion of your withdrawal unless you transfer or roll it over to an IRA or other eligible employer plan.

Can I withdraw money from my TSP without penalty?

With the TSP, you are exempt from the early withdrawal penalty if you separate from federal service in the year in which you reach age 55 or later. For IRAs, the early withdrawal penalty will apply on anything you take out up until you reach the age of 59 ½.

Can I withdraw money from my TSP early?

Normally, there is a penalty for withdrawing funds from a TSP account early, unless there are extenuating circumstances. “This is often a major concern for individuals who are considering a withdrawal from their TSP,” Schmidt said.

What is the penalty to withdraw from TSP?

a 10%
If you’re younger than 59½, you may have to pay a 10% early withdrawal penalty tax. Any tax-exempt or Roth contributions included in your withdrawal are not subject to federal income tax; neither are any qualified Roth earnings.

How do I avoid paying taxes on my TSP withdrawal?

If you want to avoid paying taxes on the money in your TSP account for as long as possible, do not to take any withdrawals until the IRS requires you to do so. By law, you are required to take required minimum distributions (RMDs) beginning the year you turn 72.

How long does it take to withdraw money from TSP?

It generally takes between 7 to 10 business days to process your request once you’ve properly completed and submitted it. We disburse withdrawals each business day. You can check My Account at or call the ThriftLine to find out the status of your withdrawal request, including whether the payment has been made.

Does TSP withdrawal count as income?

The general rules regarding the federal income taxation of withdrawals from the Thrift Savings plan are: A) All withdrawals from your traditional TSP balance are fully taxable as ordinary income; B) All qualified withdrawals from your Roth TSP balance are free from federal income tax; and C) In any non-qualified …

How often can I withdraw from TSP?

every 30 calendar days
There is no limit of the number of withdrawals you can take after you retire, though processing times limit you to no more than one every 30 calendar days.

Can I withdraw my TSP at age 55?

If you are age 55 or older when you separate from service, you can take withdrawals from your TSP without penalties.

Are TSP withdrawals considered income?

How much is taxed on a TSP withdrawal?

The TSP is required to withhold 20% of your payment for federal income taxes. This means that in order to roll over your entire payment, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of your payment, the portion not rolled over will be taxed.

How do I withdraw from my TSP after I retire?

To request a withdrawal, log into My Account and click on the “Withdrawals and Changes to Installment Payments” link on the menu. From there you’ll have access to an online tool with which to start your withdrawal.

How long does it take to withdraw money from a TSP?

The withdrawal process usually takes about 10 business days or longer depending on the nature of your request. Contact the TSP Service Office to request a personal identification number (PIN) and TSP account number if you do not already have one.

Should a take a loan from my TSP?

If need to borrow from your TSP to purchase or construct a primary residence, the better option is to take out a Residential Loan . This type of TSP loan does require additional documentation and can be repaid in up to 15 years. 6 

What is the best way to invest TSP?

Your best bet is a Roth IRA, to which you can contribute up to $5,500 a year ($6,500 if you’re over 50). The best way to use such an account to supplement your TSP is to invest your entire IRA in large-cap value stocks, small-cap value stocks and emerging markets stocks.

What age can I withdraw money from TSP?

In-Service Age-Based Withdrawal. The age-based in-service withdrawal relates to withdrawals from your TSP after age 59 1/2. It’s allowed only if you’re still active as a federal employee or in the military. Stipulations are that you withdraw at least $1,000 or your entire account balance if it is less than $1,000.