Retirement Policy

If you have separated from service, the IRS requires that you receive a certain portion of your Thrift Savings Plan account balance beginning with the year in which you become 70 1/2 (unless you are still employed). This portion, known as a “required minimum distribution,” is based on life expectancy.

If you do not withdraw or begin monthly payments in that year, the TSP must make the required distribution before April 1 of the following year. When you choose a withdrawal option, the TSP will determine if you are required to have a portion of your account paid directly to you as a minimum distribution. The TSP will notify you and make any minimum distribution payments to you as required.

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Note: Required minimum distributions are drawn proportionately from traditional and Roth balances, for those who have both.

If you remain employed after reaching age 70 1/2, the minimum distribution rules do not apply to funds in the TSP, but do apply to funds held in other tax-advantaged plans such as an IRA.

Failure to take a required distribution will result in a 50 percent penalty on the amount that should have been withdrawn.