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By: FEDweek StaffTSP account holders who are now close to making a withdrawal election will either want to act quickly before an upcoming blackout period or, as the TSP has suggested, wait until that period is over.
As the TSP prepares to launch a number of new and loosened withdrawal policies effective September 15, it will stop processing withdrawal requests September 7-14. “If you need to withdraw money before these changes take effect, we must receive your properly completed request by 11:59 p.m. eastern time on September 6, 2019,” the TSP has said.
Those who already have taken some withdrawals when the new policies take effect will be able to take advantage of the new options. Those include, most prominently:
* for in-service withdrawals, the opportunity to take up to four “age-based” withdrawals after age 59 ½ with no tax penalty per year, at least 30 days apart;
* for post-separation withdrawals, the opportunity to take an unlimited number of partial withdrawals (also at least 30 days apart), to take installment payments quarterly or annually in addition to monthly, to take partial withdrawals while installment payments are going on, and to change dollar-amount payments at any time; and
* for both in-service and post-separation withdrawals, the option to take a withdrawal solely from either a traditional balance or a Roth balance, for those who have both, in addition to receiving withdrawals on a prorated basis.
The TSP will launch on September 15 several new online features designed to reduce the chances of errors in choosing from among the withdrawal options.
Read more on TSP withdrawals at ask.FEDweek.com
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