Roth TSP and 59 1/2


Q. Federal employees now have the option of investing a portion of their Thrift Savings Plan contributions into the Roth option. As many of us know, contributions to the Roth TSP are from after-tax income. The benefit comes from tax-free earnings. The way I understand the rules, we must contribute to Roth for five years and not make any withdrawals until we are age 59½. The traditional TSP also uses the 59½ rule, unless we retire at age 55 or later.

When we make withdrawals from our TSP account, the money is divided proportionately from both the traditional and Roth funds. For example: Mr. Smith’s account is evenly divided between traditional and Roth. Each withdrawal will consist of 50 percent from the traditional TSP and 50 percent from the Roth TSP. From the way I read it, selective withdrawals from each fund are not allowed.

I am a firefighter who faces mandatory retirement at age 57. I have been contributing to both funds in TSP for over 30 years. Having met the traditional TSP rule of retiring at 55 or later, I elect to receive equal monthly payments for 20 years.

Since I have not reached 59½, am I going to be penalized for early withdrawal from the Roth TSP? There is no penalty for the traditional fund. If different withdrawal rules apply to each fund, should I not have the option of the leaving the Roth TSP untouched until I turn 59½?

A. Distributions of earnings from your Roth TSP will be subject to tax until you reach age 59½ unless you roll them over to a Roth IRA account.


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 and view his blog at

1 Comment

  1. “I have been contributing to both funds in TSP for over 30 years.”

    TSP investing has not been around for over 30 years and the Roth TSP just started last year.

    To avoid the ‘problem’ with the Roth TSP, you could instead consider only investing in the traditional TSP and a Roth IRA. You might wish to avoid the Roth TSP altogether.

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