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Chris Smith

Big Changes Coming to TSP Withdrawal Options

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On September 15, big changes are coming to your Thrift Savings Plan withdrawal options. You’ll be gaining options of how and when you can access money from your TSP account. TSP breaks it down here:

Flexible Withdrawals Begin September 2019 Current Rules
You can customize your installment payments and change your payment frequency at any time as your needs change. You can choose among monthly, quarterly, and annual installment options.  Requests to change monthly installment amounts can only be made once each year during a designated open season. 
You never have to make a full withdrawal election. When you need to make IRS-mandated required minimum distributions (RMDs) at age 70 and after, we'll automatically send you the right amount if you don't withdraw enough during the year.  A full withdrawal election is require-d the year you are separated and 70 years older, or your account becomes abandoned. 
You'll request withdrawals easily using fast and secure online tools by logging into My Account on tsp.gov.  Paper forms must be submitted by mail or fax to make or change a withdrawal election. 
You can choose to withdraw traditional money only, Roth money only, or a proportional amount of both.  All withdrawals include both traditional and Roth funds as a pro rata (i.e., proportional) distribution.
Any in-service withdrawals you make have no effect on the number of post-separation partial withdrawals you can make. You can make partial withdrawals even if you receive installment payments.  Only one age-based in-service withdrawal or one post-separation partial withdrawal allowed in a lifetime. Then a full withdrawal election is required. 

Now is a great time to review your TSP account and ensure your information and contribution is current and accurate, visit TSP.gov or LiteBlue. Click here for TSP’s downloadable Questions and Answers about Changes to TSP Withdrawal Options.

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