Taxes on TSP withdrawal


Q. I retired in 2005 with 30 years in the military. I am 58 years old. If I want to make a full withdrawal now, how much will I pay in taxes? If I wait until I’m 59½, will I pay less?

A. TSP withdrawals are taxed as ordinary income. The amount of income tax you pay will depend upon your tax return for the year in which you take the withdrawal. If you withdraw the money before you reach age 59½, you will likely also have to pay the 10 percent early withdrawal penalty. You’ll avoid this penalty by waiting until age 59½.


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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

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