Do you know your options for withdrawal from the Thrift Savings Plan?
You may be surprised to hear, but you are allowed only one partial and one full withdrawal.
Link to TSP Article Discussed:
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Cooper Mitchell helps federal employees better understand their benefits and helps them retire on their terms. Using financial planning and investment management through Cooper is able to tackle the issues that are unique to federal employees.
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The Thrift Savings Plan (TSP) is a retirement savings program available for federal employees and members of the uniformed services. It offers various investment options, tax benefits, and flexible withdrawal options to help individuals secure a comfortable retirement. Once you reach the age of 59½, you have several choices for withdrawing your funds from the TSP.
One option is to take a full withdrawal of your TSP account balance. This allows you to withdraw your entire savings at once, either as a single payment or in multiple partial payments. However, it is important to note that once you take a full withdrawal, you can no longer make any contributions to your TSP account.
Another option is to take monthly payments from your TSP account. These payments can be a fixed dollar amount or based on life expectancy. With this option, you can continue to receive regular income from your TSP while still benefiting from potential growth in your investment. You also have the flexibility to change the amount of your monthly payments or stop them altogether if needed.
If you prefer to keep your funds invested in the TSP after retirement, you can select the “TSP annuity” option. This allows you to convert a portion or all of your TSP account balance into a stream of monthly payments that will last for your lifetime or a specified period. An annuity provides a steady income stream, but it is important to carefully consider the terms and conditions before choosing this option.
Furthermore, you may choose to transfer your TSP balance to an Individual retirement account (IRA) or another eligible retirement plan. This transfer can provide more control over your investments and potentially offer a wider range of investment options. By moving your funds to an IRA, you can continue to benefit from tax advantages and have the flexibility to make changes according to your retirement goals.
Lastly, you have the option to request a partial withdrawal from your TSP account. This allows you to withdraw a specific amount without closing your account entirely. This option is beneficial if you have a specific financial need that requires a lump sum payment.
Before making a decision, it is essential to carefully evaluate your financial situation, retirement goals, and future needs. Consult with a financial advisor or TSP representative to understand the pros and cons of each withdrawal option and how they align with your unique circumstances. Keep in mind that TSP withdrawals are subject to income tax regulations and potential penalties, so it is crucial to be well-informed about the tax implications before making any withdrawals.
In conclusion, the TSP offers several withdrawal options to help retirees access their savings. Whether you choose a lump sum payment, monthly payments, annuity, or transfer to an IRA, it is wise to carefully consider your financial circumstances and long-term goals. With careful planning, you can make the most of your TSP savings and secure a comfortable retirement.
Hi Cooper. Question: Once I start receiving withdrawals after retirement and I die, would my children still receive the remaining TSP balance as an inheritance?
Could you do a video for a federal employee who is 68 and will retire at 75. I have been making the minimum contribution since most of my investments went into my buisness. I sold my company and want to invest now in TSP. Can you hook me up?
How does one estimate how long they are going to live? You can be taken at any moment.
Glad i discovered your channel! Very informative and educational! Thank you so much!
Annuity… no way! worse option period.
I just got out the military and I want to get my money out how do I take it out
Great video but I understand that the withdrawals options of full and partial have changed or will change this year effective 9/152019. Will you be doing a new video?
Thank you
In 2019 there was news of unlimited withdrawals just like a bank or funded IRA. Check on the internet. This news was just announced 05/01/2019 so Cooper was correct for the time it was made. Cooper , please do as update with the new rules and procedures. Love your work and timely information. see TSPFS10 (5/2019)
this information is old . When do you plan to post the updated information … and where are you Cooper ??? MIA ??
https://www.fedweek.com/tsp/summary-of-upcoming-tsp-withdrawal-changes/
Thank you. This stuff always helps me even though I hope I never have to make a withdrawal from tsp before retirement
If I am 100% p&t disabled. What should I do with my tsp? I am unable to work due to my service connected injury’s.
There new withdrawal options coming here in 2019.
https://www.myfederalretirement.com/tsp-new-withdrawal-options/
Hello, Cooper. Excellent video. I am nearing retirement and am considering the actuarial monthly TSP withdrawal. I will be eligible to draw immediately from the TSP without penalty. I would like to know if once I decide on the actuarial monthly withdrawal option if that choice can be amended later on. Also, if I decide to leave everything in the TSP on my retirement date, can I at some later time decide to roll it over into an IRA? Does making a partial TSP withdrawal outside the scope of a monthly actuarial withdrawal then obligate me to withdraw the balance? Thank you!
You sound like Owen wilson
Look you get two shots at your money with TSP in retirement. And the tax man gets more and more the older you get as it is an IRA.
So today the government TSP has a "single life annuity" feature. Say you turn it on and use it to supplement your income but the catch is "single life". Say you die and your spouse has a lot of expenses. "Poof" this income stream is gone. Taking the money elsewhere looks better especially if there is a beneficiary assigned. "TSP is not" your "Fiduciary money manager or firm like Fidelity Investments that can help you be the CEO of your money. The same type of low expense Emergency, Protected or Growth vehicles and well you take control and get a free for the asking plan you execute. TSP and your hard work got you your money. Define your Emergency Protected or Growth pools of monies and live worry free into your golden years. Take some time and try this https://www.fidelity.com/calculators-tools/retirement-planning-and-guidance.
I am a longtime Fidelity Customer and hope you find this useful.
If I get a disability retirement at age 54 and I choose to have monthly payments instead of a full withdrawal from tsp fund do I have to pay penalty?
Hello , I'm government employee and I will retired in 15 years and I'm trying to parcial withdrawal money from TSP. I can able to do that? thanks
Hi Cooper, regarding federal law enforcement retiring at age 50, can you elaborate on the rule whether the rule states that you can retire in the year that you will turn 50 and not get hit with 10% early withdrawal. For example: retire in January at age 49 but will turn 50 in December. Does this qualify? Apologies if dumb question. Just needed clarification. Thank you. Great job on the videos.
Great video Cooper…very helpful. I have recently retired from the federal government and I am over age 59.5. I am considering taking a full withdrawal using a fixed amount of monthly payments. Since my TSP account currently consists of both C fund and G fund balances, what account balance or balances will be used as the source of funds for my monthly withdrawals? Thanks in advance.
Good video. What would be the total tax % + penalty % + any other fees on a full withdrawal under the age of 59?
Basically what is the total % of all deductions the IRS takes before you're in the clear?