Full TSP withdrawal

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Q. I will be retiring Dec 2014 and want to withdraw my entire TSP monies. What is the federal withholding in percentage that will be taxed? And do they take it off the top of your balance or will it happen at income tax time?

A. Your withdrawal will be reduced by 20 percent for federal income tax withholding. The amount you actually owe will determined when you file your income tax return for the year.

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