New options for TSP withdrawals go online
- By Lia Russell
- Sep 16, 2019
New options for federal employees and retirees to withdraw finds from their Thrift Savings Plan went live on Sept. 15.
Under the new policy, feds 59.5 years of age and older can make four withdrawals per year from their TSP account and can elect to take funds from their Roth IRA account, a traditional IRA account, or a mix of both. Retired feds 70.5 or older are no longer required to make a full withdrawal, although they will have to take distributions as required under tax law.
The new rules are required under the bipartisan Thrift Savings Plan Modernization Act that passed Congress in 2017. The changes come two months ahead of the Nov. 21 deadline that the TPS Modernization Act had given the Federal Retirement Thrift Investment Board (FRTIB) to implement the new rules.
As of 8 A.M. on Monday morning, as many as 9,400 withdrawals had been processed in the day and a half since the new website had gone live, according to Tanner Nohe, a project manager at the FRTIB. Speaking at a Sept. 16 board meeting, Nohe said that 5,000 of those transactions were "one and done" withdrawals of individuals exiting the TSP system that were completed without any paperwork, with the remaining petitions needing signatures for processing.
Other changes include allowing participants to stop, start and make changes to their installment plans at any time. According to Nohe, approximately 63,000 participants who had taken hardship withdrawals are now allowed to contribute to their accounts, and the FRTIB is now sending notices to inform them of the new rules.
Lia Russell is a staff writer and associate editor at FCW covering the federal workforce. Contact Lia at email@example.com and follow her on Twitter at @LiaOffLeash.