TSP withdrawals

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Q. I have approximately 200K in my TSP. I would like to leave the principle to my children and take a yearly withdrawal of the interest earned. What, and I know it is an estimation, would you think is a safe percentage to withdrawal yearly?

A. Interest does not accrue in a TSP account. The share values change in response to changes in value. The maximum safe withdrawal rate will depend upon a number of factors including your age, health and how the money is invested and managed over time. Calculating this estimate is beyond the scope of this forum.

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  1. I am a CSRS 50 year old employee who would like to withdraw $80000 from my TSP to cover unsecured debt. Is this smart? My debt is strangling me.
    What is the tax hit and how can I avoid it?

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