Full Withdrawal from the Thrift Savings Plan
If your Thrift Savings Plan account balance is $200 or more when you separate
from service, you can leave your money in the TSP or you can request to withdraw
your entire account in either:
- a single payment,
- monthly payments,
- or for amounts of $3,500 or more, a life annuity.
You may withdraw your account by using any one or any combination of these
withdrawal options. For example, you might withdraw your entire account in
monthly payments, or you might take half of your account as a single payment and
half of your account as an annuity.
If you choose to withdraw your account in a single payment, your entire
balance is paid at one time. You can have the TSP transfer all or part of
any single payment to a traditional IRA or eligible employer plan.
If you choose to withdraw your account in monthly payments, you must also
choose whether you want the TSP to compute your payments based on
- the IRS life expectancy table, or
- whether you would like to receive a specific dollar amount each month.
If you choose to receive a specific dollar amount each
month, you may be able to transfer all or part of your payments to an
IRA or other eligible employer plan. This will depend on the number of
payments you are expecting to receive.
If you choose to withdraw your account in the form of an
annuity, you can have the TSP purchase a single life annuity for you, a
joint life annuity with your spouse, or a joint life annuity with someone other
than your spouse. You cannot request an annuity with an amount less than
$3,500. If you elect an annuity, you must also choose among several
annuity features that are available (e.g., a 50 percent or 100 percent survivor
benefit, or a cash refund or "10-year certain" feature.) Not all
features are available for each type of annuity.
If you choose to withdraw your account as a mixed withdrawal
(i.e., any combination of the full withdrawal options), the rules for each
withdrawal option will still apply. Tax withholding rules differ for each
option. For example, if you make a mixed withdrawal and you choose to
purchase an annuity with a portion of your account, no taxes will be withheld,
but annuity payments will be taxed as they are made. If you choose monthly
payments, the tax withholding rules that apply to your monthly payments will
differ depending on whether your payments are based on life expectancy are
expected to last less than 10 years or 10 or more years. If you elect to
transfer all or part of your single payment and your monthly payments, the
transfers must be to the same traditional IRA or eligible employer plan.
If your account balance is less than $200 when you separate, the TSP will
send you a check for your account balance. Spouses' rights will apply to
all full withdrawals of more than $3,500.
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