TSP early withdrawal


Q. I am a contractor in between jobs and would like to withdraw my Thrift Savings Plan. If there are any owed monies to the government, will that be taken from my TSP?  How much tax will be taken from me if I do a lump sum? And is there a difference in taxes if I do a monthly payment? Lastly, is there a hardship exemption rule if unemployed? I am retired from active duty (20 years) and 42 years old.

A. There is an “it depends” at the beginning of the answer to each of your questions and I can’t provide simple answers with the information you’ve provided. I suggest that you review the information covering withdrawals after leaving federal service at www.tsp.gov, including the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. After that, if you still have questions, submit them and I’ll try to answer them.


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.

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