TSP withdrawal for family need


Q: I worked for the federal government for about 12 years. When I left, I used some of my Thrift Savings Plan money as a down payment on my current home. That turned out to be a good move, since I bought when the market was down and my home’s value has gone up. However, with the recent downturn in the market, my parents have lost a tremendous amount of money and are in financial need. I would like to give them the remaining money in my TSP account (about $10,000). Is there any way to roll over my TSP funds to my parents without taking a large financial hit? As I understand it, if I withdraw my funds to give to them, I would lose about half the money to penalties and taxes.

A: I’m not aware of any exception to the taxes and penalties that will apply based on the things you’ve mentioned. You should consult a tax adviser to be sure, however.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

Leave A Reply