When Can I Draw From My Thrift Savings Plan

The Thrift Savings Plan (TSP) is a Federal Regime-sponsored retirement savings and investment plan. It offers the same type of savings and tax benefits that many individual corporations offering their employees under "401(k)" plans.

Blended Retirement System (BRS) Members of the Uniformed Services
If you are a member of the uniformed services who began serving on or after January 1, 2018, your service automatically enrolled you in the TSP (or will) once y'all had served sixty days and 3% of your bones pay is deducted from your paycheck each pay catamenia and deposited in the traditional balance of your TSP account, unless you have fabricated an election to modify or cease your contributions. You can brand an election by following the instructions in Starting, Changing, and Stopping Your Contributions.

Non-BRS Members of the Uniformed Services
If you lot are a member of the uniformed services who is not covered past the Blended Retirement Arrangement (BRS), your account is established by your service subsequently you make a contribution election using your service's automated system, if it has one. For example, most members of the uniformed services use myPay. If your service does not use an electronic system, you lot tin complete Course TSP-U-1 , Election Form and render it to your service.

Reentering Members of the Uniformed Services
If you were already in the BRS plan before you left the service—whether as a new member of the uniformed services or an opt-in—yous will exist automatically reenrolled when you lot reenter. If you were non in BRS but had fewer than 12 years of service when y'all left, your service may give you the opportunity to opt in when you reenter. In either case, assuming you had served 60 days before leaving, your enrollment will begin with the outset pay menstruation after reentering. If neither state of affairs applies to you, yous can still start a TSP business relationship or resume contributing to your existing account every bit a non-BRS fellow member. Follow the instructions in Starting, Changing, and Stopping Your Contributions .

New TSP features
Later on this yr, TSP will be introducing exciting features to make your TSP feel even better. Yous'll have more flexibility in how you access My Account, more than options to contact TSP representatives if yous need help, and fifty-fifty more transactions you can complete smoothly and securely online. Be certain to pay attention to TSP correspondence in the coming months and visit this webpage for updates: https://www.tsp.gov/new-tsp-features/?utm_source=website&utm_medium=banner&utm_campaign=getexcited1

Regular army National Guard Soldiers on state active duty may contribute to the TSP.

Basics: The TSP is a defined contribution plan. This means that the income Soldiers receive from a TSP account depends on the amount contributed and the earnings on those contributions. This is unlike the Uniformed Services Retirement System in which the income received is based on years of service and the rank held at the fourth dimension of retirement. If contributions from basic pay are fabricated, 1 to 100 percent of any incentive pay or special pay (including bonus pay) may also exist contributed, up to the limits established by the Internal Acquirement Lawmaking (In 2022, that amount is $20,500). In improver to that amount,  "Take hold of-up contributions " of up to $6,500 for 2022, may be made past eligible Soldiers (age l or older or turning 50 during the calendar yr). All funds contributed vest to the beneficiary, even if they do not serve the 20 or more than years ordinarily necessary to receive uniformed services retired pay.

Roth TSP: With the introduction of Roth TSP, Soldiers have the potential for ii types of balances in the TSP account: TSP and Roth TSP. The Soldier's own contributions tin exist designated as traditional TSP or Roth TSP. Roth contributions are taken out of the paycheck after income is taxed. When Roth funds are withdrawn, they are tax-gratis. Additionally, there are no taxes on the earnings as long as the Soldier is at to the lowest degree age 59½ (or disabled) AND the withdrawal is fabricated at least 5 years later the beginning of the yr in which the first Roth contribution was made.

The table beneath compares the treatment of traditional and Roth TSP contributions: The table beneath compares the treatment of the two different types of contributions.

Treatment of traditional and Roth TSP contributions

The Handling of...	Traditional TSP	Roth TSP
Contributions	Pre-tax	After-tax1
Your Paycheck	Taxes are deferred , and so less coin is taken out of your paycheck.	Taxes are paid up front , so more than money comes out of your paycheck.
Transfers In	Transfers immune from eligible employer plans and traditional IRAs	Transfers allowed from Roth 401(g)s, Roth 403(b)s, and Roth 457(b)s
Transfers Out	Transfers allowed to eligible employer plans, traditional IRAs, and Roth IRAstwo	Transfers immune to Roth 401(k)s, Roth 403(b)southward, Roth 457(b)s, and Roth IRAs3
Withdrawals	Taxable when withdrawn	Taxation-gratuitous earnings if five years have passed since January 1 of the year y'all fabricated your first Roth contribution, AND you are age 59½ or older, permanently disabled, or deceased

¹ Roth contributions are subject field to Federal (and, where applicable, state and local) income taxes, while traditional contributions are not taxed until withdrawn. Even so, both Roth contributions and traditional contributions are included in the amount of wages used to summate payroll taxes (e.g., Social Security taxes).
² You would accept to pay taxes on whatever pre-revenue enhancement amount transferred to a Roth IRA.
³ Transfers to a Roth IRA from a Roth TSP are not subject to the income restrictions that apply to Roth IRA contributions.

How to Contribute: Soldiers are eligible for this benefit as before long equally they join the uniformed service. Participation in the TSP is optional. To offset contributing to the TSP, consummate the TSP Election Class ( TSP-U-1 ). The form can be downloaded from https://world wide web.tsp.gov/making-contributions/start-modify-end-contributions/. On this form, indicate the percentage of basic pay, incentive pay, special pay, or bonus pay to be contributed. Soldiers may besides contribute to the TSP by signing up through the MyPay website (https://mypay.dfas.mil/#/). Some percentage of bones pay must be contributed in order to contribute from incentive or special pay.

Revenue enhancement Benefits: TSP contributions are "tax-deferred" from taxable pay, significant that they are deducted earlier Federal and, in almost all cases, state income taxes are withheld. Therefore, taxable income is smaller and less is paid in taxes. In addition, Federal taxes are not paid on the money contributed until it is withdrawn from the TSP account. Any coin earned over the years is besides revenue enhancement-deferred. This means that no income taxes are paid on TSP account contributions and earnings until the money is received - normally after retirement. The longer money is invested, the greater the do good of revenue enhancement-deferred earnings volition exist.

Flexibility: TSP offers a choice of funds in which to invest. For a clarification of these funds, including cardinal features, historical returns, and a detailed description, please see https://www.tsp.gov/index.html . The TSP allows the investor to classify contributions among the different funds based on the investor's personal preferences. It also allows the investor to change contribution allocations and transfer coin between funds on a daily footing.

Withdrawing Funds: Soldiers are eligible, merely not required, to withdraw from the TSP account as soon as they separate from the uniformed services. Service members should be enlightened that there may be revenue enhancement penalties for withdrawing funds prior to historic period 59½. For more than information please consult the IRS TSP fact canvass . Previously, the law required that you make a total withdrawal election once you turned 70½ and were separated from federal service. If yous failed to do that, we would initiate an business relationship "abandonment" process. The new law that began September fifteen, 2019 does abroad with this requirement. You will never be required to brand a full withdrawal election, and we will no longer abandon accounts as we have in years past. If your account has already been abased, you'll be able to restore the business relationship without making a full withdrawal election. Your restored balance tin can remain in the programme (subject To RMDs) with all the new withdrawal options bachelor. Active Soldiers are not required to make withdrawals, regardless of age. Payments can be deposited directly into checking or savings accounts. The TSP tin can also transfer all or role of any unmarried payment or, in some cases, a serial of monthly payments, to a traditional IRA or eligible employer plan.

As of September 15, 2019, you now take more than options for how and when yous can access money from your TSP account. These options fall into the following categories:

• After you split from service, you tin can take multiple post-separation partial withdrawals

• If you're 59½ or older and still working in federal civilian or uniformed service, you can have up to four in-service withdrawals each twelvemonth

• You'll be able to choose whether your withdrawal should come from your Roth balance, your traditional remainder, or a proportional mix of both

• You will no longer need to make a full withdrawal election later you plow 70½ and are separated from federal service (Yous will still need to receive IRS required minimum distributions (RMDs))

• If you lot're a separated participant, y'all'll be able to take monthly, quarterly, or annual payments

• You'll be able stop, first, or make changes to your installment payments at any time

• Yous'll have enhanced online tools to help you lot brand withdrawals in the My Account section of https://world wide web.tsp.gov/alphabetize.html .

For more information on change to TSP Withdrawal options visit: https://www.tsp.gov/publications/tsplf15.pdf

Regulations: TSP regulations are published in title 5 of the Code of Federal Regulations, Parts 1600 - 1690, and are periodically supplemented and amended in the Federal Register.

Change in Required Minimum Distribution Age:

The SECURE Act, which passed on December 20, 2019, changes the age at which you have to start taking required minimum distributions from 70 ½ to 72. The police excludes people who turned 70 ½ on or earlier December 31, 2019. Click here for more than information.

Implementation of 5% Automatic Enrollment Percentage for Thrift Savings Plan Participants

On October i, 2020, the Federal Retirement Thrift Investment Lath (FRTIB) volition increase the automatic enrollment per centum from 3% to 5% of pay for all Federal Employees Retirement Arrangement (FERS), Civil Service Retirement System (CSRS), and Blended Retirement System (BRS) participants who are automatically enrolled in the TSP on or after October 1, 2020, and for BRS participants automatically re-enrolled in the TSP on or after January ane, 2021, per v CFR § 1600.34 and 1600.37. The Thrift Savings Plan Enhancement Act of 2009 grants the FRTIB the authority for this change. This change will non bear on the contribution rates in place for FERS and CSRS participants who were automatically enrolled in the TSP prior to October 1, 2020, or BRS participants who were automatically enrolled prior to Oct 1, 2020, and did not terminate their contributions. Click here for more information.

For more information, please visit the Thrift Savings Programme webpage maintained by the Federal Retirement Thrift Investment Board:
https://world wide web.tsp.gov/index.html

Thrift Savings Plan Calculators:
https://www.tsp.gov/calculators/

MyPay website:
https://mypay.dfas.mil/#/

Office of the Secretary of Defense, Armed services Bounty website:
https://militarypay.defense.gov/

Summary of Thrift Savings Plan:
https://world wide web.tsp.gov/publications/tspbk08.pdf

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Source: https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Thrift-Savings-Plan-%28TSP%29?serv=123

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