Q. I am still in government service but did need to take a lump-sum withdrawal of my TSP funds at 59-1/2 years old. My plan is to continue to work and to pay into my TSP account. What will my withdrawal options be when I retire at the planned age of 68?
A. You may either take a full withdrawal as monthly payments or a terminal lump sum. You could also effectively complete another partial lump-sum withdrawal by taking a TSP loan before you retire and then default on the repayment. The unrepaid loan balance will be declared a taxable distribution after the grace period expires.
