TSP tax percentage


Q. I am a FERS Federal employee, turned 60 last December, and have 20 years civilian service in a few days. I have an outstanding TSP general purpose loan with $37,000 balance. I had planned to keep working a few more years but my health won’t permit (no disability claims or anything). We used this loan to make a down payment on a home. I am trying to find out what the taxable distribution might be if I retire in July this year. TSP account (no Roth) has $193,000 now after the loan and I would like to see if I can take a one-time payment to pay off this house ($46,000) as well as absorb the loan. I can’t find the tax percentage that might be applied.

Where can I find the rules for the one time distribution at retirement? And one website said 10% for the distribution and another said 30%. That is a big difference.

A. You’ll find the information you’re looking for in the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. In particular, the table on page 3 should be helpful.


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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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