Q. I plan on retiring next year at age 59½ as a FERS retiree. Can I withdraw all of my Thrift Savings Plan savings as a lump-sum payment? If so, what are my tax liabilities?
A. Yes, you may withdraw your TSP savings as a lump sum following separation from service. You will report the withdrawn amount as ordinary income on your tax return for the year. The amount of your tax liability will depend upon the details of tax return. Your withdrawal will be subject to 20 percent mandatory withholding against your tax liability. See https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for more information.
