“Hi, I have a question regarding Roth TSP which I have not gotten a clear answer on. I will be 54 this year. I plan on retiring at 62 which is 8 years from now. I started contributing to a traditional TSP when I started my Federal employment. I now want to start a Roth TSP account. However, I have heard that an employee has to contribute to a Roth TSP for 10 years before the withdrawal. Otherwise, a penalty applies. Is this true? Thank you for your consideration.” – Tat
This question is about avoiding taxes and penalties when withdrawing money from the Roth TSP. First, let’s review this TSP option:
You may transfer or roll over to a Roth IRA or employer Roth account
As long as earnings are “tax-qualified,” you will not be penalized for the distribution of those funds. They will come out tax-free. The 10% early withdrawal tax penalty never applies to contributions made to Roth balance or to qualified distributions of earnings
This tax penalty may apply to non-qualified distributions.
You must specify if you wish to take your withdrawal from traditional, Roth, or both balances, for example, if you want to take a $10,000 withdrawal from a $150,000 TSP balance that is invested:
Then, the pro-rata withdrawal would come out as:
You may specify if you would like it all to come from traditional during the withdrawal process.
Bottom line:
Reference: Important Tax Information About Payments From Your TSP Account
Warning: Taxes can be complicated, it might be best to consult with a professional if you are not sure how to withdraw from your TSP to your best tax advantage!
“Is there a way, I can find out how much I will receive at retirement and when I can collect? I worked 24 years, but I don’t know my high
“The question is the following: My wife and I are both federal employees. I will retire before her. Upon my death, she will receive a survivor annuity (50% of my
“From my understanding, those military retirees who are getting a military retirement aren’t eligible for the FERS Supplement. If I’m incorrect someone please let me know.” – Golfnut.
“I worked from 2010 to 2013 at VA Hospital. I quit/and then I work back in 2018 until now. My question is are those 3 years that I work before
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7 CLASSIC RETIREMENT MISTAKES Federal Employees Make
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