Q. I am retiring under FERS with 23 years of service at age 66. Can I set up with TSP to draw an amount from my account on a yearly basis? Do I have to pay taxes on the amount that I withdraw? Is there an age limit where I do not have to pay taxes on the withdrawal amount?
A. You may only set up automatic distributions from your TSP on a monthly basis. Every dollar you withdraw during the year will be counted as taxable income for the year, regardless of your age.