TSP withdrawals and Social Security earnings test


Q. Do lump-sum Thrift Savings Plan withdrawals (either partial or full) that are made after retiring from FERS or CSRS count as wages for the Social Security earnings test? I found lots and lots of stuff saying TSP does not count as wages, but then also found something on the Social Security website that reads, “a Federal thrift Savings fund is treated as a trust in section 401(a) of the IRC. Therefore, employer contributions to your TSP are not wages, however your elective contributions to the fund are wages.”

A. What you’ve read is saying that your TSP payroll deferrals are counted as wages when computing Social Security taxes while you are working. TSP withdrawals are not counted as income for purposes of the earnings test after you retire and are eligible for Social Security benefits.


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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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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