By Kurt Mears, Advance Capital Management Financial Adviser
From VA doctors to national security officers, we’ve had the pleasure to work with many federal government employees. One way in particular is by providing help navigating the Thrift Savings Plan (TSP). Recently, there has been some important changes in the TSP that I would like to highlight.
As of September 15, there were some significant modifications to the way you can access money from your TSP account. Essentially, you now have more options.
More TSP withdrawal options
First and foremost, after you retire or leave federal work, you can now take multiple post-separation withdrawals. For those over age 59 ½ and still working, you are now allowed to take up to four in-service withdrawals per year, opposed to just one in your entire career.
Greater TSP account choices
Further, you can now choose whether your withdrawal comes from your Roth balance, Traditional balance, or a proportionate combination of both. You also no longer need to make a full withdrawal election after you turn age 70 ½ and are separated from federal service. (However, you will still need to take your RMDs!)
Flexible TSP withdrawal intervals
Finally, if you’re a separated participant, you now have greater flexibility with your withdrawals – monthly, quarterly or annual. And, you can make changes to those monthly, quarterly or annual payments at any time.
This is just a high-level overview, and I would recommend that you should consult a financial adviser who can assess your entire financial situation to see what strategies may be most appropriate for you.
Also, I encourage you to learn more about your retirement benefits, including the FERS basic benefit, the Thrift Savings Plan and other retirement planning steps, by downloading our free, easy-to-understand guidebook, FERS Made Simple: Understanding and Maximizing Your Benefit. (click the button below)
Kurt Mears is a Chartered Retirement Planning Counselor who provides comprehensive wealth management solutions, such as retirement planning and investment advice, to help clients work toward achieving their financial goals. He is also one of Dave Ramsey's designated SmartVestor investing professionals.