TSP Withdrawal Question

GSWarrior2017

PEB Forum Veteran
Registered Member
#1
When would an active duty member being medically retired/separated be able to click on the "Withdrawal" option on the TSP website? Is it only once your DOS/ETS date has been updated in the system or after your date of separation or some other date? The button is grayed out for me because I don't have a date yet. My question is: at what point in the process would that option be accessible to me?

Also, does anyone have any experience on how quickly your TSP withdrawal hit your account from the time of your withdrawal request?
 

gsfowler

Staff Member
PEB Forum Veteran
#2
When would an active duty member being medically retired/separated be able to click on the "Withdrawal" option on the TSP website? Is it only once your DOS/ETS date has been updated in the system or after your date of separation or some other date? The button is grayed out for me because I don't have a date yet. My question is: at what point in the process would that option be accessible to me?

Also, does anyone have any experience on how quickly your TSP withdrawal hit your account from the time of your withdrawal request?
TSP withdrawal takes about a week once request the funds after you are separated for a medical condition.
 

ANSU07

PEB Forum Veteran
Registered Member
#6
Are there any benefits to leaving It in (potentially getting federal job down the road)?
Yes, if you get a FED job and already have a MIL TSP account, you can transfer and consolidate to a single CIV account. I did it when I left the reserves.
 

CaliGrl03

PEB Forum Veteran
Registered Member
#8
Happy I stumbled upon this thread - if I don't intend on getting a federal job, where would I transfer that money? Would it go into my bank account and I get taxed for early withdrawal? I'm totally in the dark on how to proceed with mine.
 

Mk45Gunner

PEB Forum Veteran
Registered Member
#11
It's taxed and I believe there's a 10% early withdrawal fee added as well. I read this on the TSP site a few months ago when I was looking at doing the same.
 

Pyro

PEB Forum Veteran
Registered Member
#12
If you roll it into a retirement account there should be no penalty! If you try to roll it into your checking account first, there will be a pretty big penalty. If you have a ROTH, put it in there, a lot of people aren't forced into a traditional IRA, you have to make decent money a year to fall into that boat. If you have a company plan, i.e. new job, you can put it there. Do not put it into your checking/savings account.

https://www.tsp.gov/LifeEvents/career/seperatingFromGovService.html

Everyone definition of decent money is different so I'll cover it. If married and making more than $186,000, or single, making more than $118,000 than you have to start looking into traditional IRA's, less than that go ROTH.
 

GSWarrior2017

PEB Forum Veteran
Registered Member
#14
According to the TSP site, there can be a tax-free distribution from the Roth portion of your account --The earnings in your Roth balance become qualified for this when two conditions have been met:

1) 5 years have passed since January 1 of the calendar year in which you made your first Roth contribution, and (I MEET THIS)
2) You have reached age 59 1⁄2 or become permanently disabled, or in the case of your death (I HAVE BEEN CLASSIFIED AS 100% DISABLED P&T BY THE VA)

Two questions:

1. Since I am under the penalty-free withdrawal age of 59 1/2, will I be penalized 10% of my TSP upon withdrawal if I am classified as 100% disabled (Permanent and Total) by the VA? Is the VA an accepted source of permeant disability by the TSP?

2. Will I be taxed 20% on the TSP since 5 years have passed since I made my 1st Roth contribution?


Sorry if I'm being a bit slow since it is spelled out in balck and white. I just want to make sure I am interpreting this correctly.
 
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GSWarrior2017

PEB Forum Veteran
Registered Member
#16
20% tax was withheld for my withdrawal, 0 penalty. I got all of that tax back in the next years filing.
Thanks for the reply. So, with ROTH the tax is actually withheld at the time of withdrawal, but is returned to you with your tax return? Makes sense.

The TSP rep I spoke with said something about having to set aside the tax myself to pay that when I file because TSP doesn't withhold the taxes. I may have to call them back to clarify.
 
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