Age-59½ in-service withdrawal Age-59½ in-service withdrawals are withdrawals that you can make from your TSP account when you’re age 59½ or older and still employed by the federal government. You can only withdraw funds in which you are vested based on your years of service, and the amount must be at least
To request a penalty-free Traditional TSP withdrawal, you must meet specific eligibility criteria. Below are common scenarios that may qualify you for a penalty-free withdrawal: Age 59½ or Older – Once you reach this age, you can typically withdraw from your TSP without facing the 10% early withdrawal penalty. You can also use TSP calculator
You can only withdraw funds in which you are vested (i.e., funds you are entitled to keep) based on your years of service. The amount of your age-59 ½ withdrawal must be at least $1,000 or your entire vested account balance (even if it’s less than $1,000). You may only take up to four age-59 ½ withdrawals per calendar year.
Not to worry, you can withdraw from the TSP knowing that that 10% penalty will be waived. Even if you are deferring your pension until a later date, since you separated from service the year you attained age 55, you are allowed to take a portion or all of the TSP, penalty-free.
The TSP must notify the spouse before the employee’s in-service age-59.5 withdrawal can be completed. If the spouse’s whereabouts are unknown then the employee must contact the TSP to apply for an exemption. A summary of TSP in-service age-based 59.5 withdrawals is presented in the following table: TSP In-Service Age 59.5 Withdrawal Rules
Learn how to withdraw from your TSP penalty-free at age 59½ and roll over to an IRA. Find out the advantages, requirements and tax implications of age-based withdrawals.
Three TSP Withdrawal Options Lump Sum Distribution. The first option to access the TSP is taking a lump sum distribution. Once you reach one of the scenarios previously discussed, you are allowed to take a partial withdrawal once every 30 days. You can also elect to take all of the funds out of your TSP.
The following federal employees qualify for early TSP withdrawals at age 50, instead of the usual 55: Law Enforcement Officers (LEOs) – Includes FBI agents, Secret Service officers, Border Patrol agents, ... Generally, you can withdraw from your TSP without penalty at age 59 1/2. There are some exceptions, such as separation from service ...
With perhaps thousands of federal employees having to leave federal service as a result of reductions-in-force (RIFs), the question becomes for many: How to access their Thrift Savings Plan accounts? In column one of a two-part series, Ed Zurndorfer discusses how separated federal employees younger than age 55 can make penalty-free TSP withdrawals. Presented in this column is the TSP annuity ...
Age-59½ In-Service Withdrawals. Those who are age 59½ can take withdrawals from their TSP account as long as they withdraw from funds in which they are vested. The amount must be at least $1,000 (or the entire vested balance if less than $1,000). Only four age-59½ withdrawals may be taken per calendar year from the account associated with ...
2. The Age 55 Rule: For Those Retiring Early. Federal employees who retire (or separate from federal service) in the year they turn 55 or older qualify for an exception to the early withdrawal penalty.This is known as the “Age 55 Rule.” If you plan to retire at age 55 or beyond, you can access your TSP funds without the 10% penalty.
When you hit 59½, and you are still in federal employment, you can fill out an age-based TSP Withdrawal form (Form TSP-75) and make a full or partial withdrawal from your TSP account, with the same options as you would have (full TSP withdrawal, partial withdrawal, etc.) after separation from service.
One of the most well-known TSP rules is the age 59 ½ rule, which imposes a 10 percent penalty if you withdraw from your TSP before, you guessed it, age 59 ½. Actually, this isn’t a TSP rule but one that the IRS imposes on most retirement or tax-advantaged accounts, including 401(k)s, 403(b)s, IRAs, and some insurance products.
What Is An Age-Based Withdrawal? If you’re an active federal employee age 59 ½ or older, you can withdraw a portion or all of your vested balance from your TSP account. Unlike a hardship withdrawal, the age-based withdrawal does not require a financial need, and your withdrawal will not incur the 10% early withdrawal penalty. Eligibility
You can withdraw from your Thrift Savings Plan (TSP) without facing the 10% early withdrawal penalty at age 59½. While you avoid the penalty, your withdrawals are still subject to regular income taxes unless from a Roth TSP, where qualified withdrawals are tax-free. Additionally, if you retire after age 55 (or age 50 for certain public safety ...
As you know, if you take an in-service withdrawal from your Thrift Savings Plan (TSP) when you’re younger than 59½, you’re subject to an IRS 10% penalty. ... LEOs & SCEs Can Take Penalty-Free Withdrawals At Age 50. Thanks to the “Protecting Public Safety Employees Timely Retirement Act” that went into effect in 2023, eligible LEOs and ...
Age Milestones for TSP Withdrawals. Here are some age-related milestones to keep in mind: Age 55: If you separate from federal service in or after the year you turn 55, you may withdraw from your TSP without the 10% early withdrawal penalty. Age 59½: Once you reach this age, you can take penalty-free withdrawals regardless of your employment ...
2. In-Service Withdrawals at Age 59½ and Older. Key number: 59½. Once you turn 59½, the TSP lets you take “age-based” in-service withdrawals—even if you’re still working.This is a way to access your funds early and reposition them for better growth, income, or flexibility.
