When can you withdraw money from TSP without penalty?
With the TSP, you are exempt from the early withdrawal penalty if you separate from federal service in the year in which you reach age 55 or later.
For IRAs, the early withdrawal penalty will apply on anything you take out up until you reach the age of 59 ½..
At what age do I have to start withdrawing from my TSP?
701) You must begin withdrawals when you turn 70 ½ In general, separated participants are expected (required) to begin withdrawing from the TSP once they attain the age of 70 ½, but you don’t have to start drawing on your account exactly when you turn 70 ½.
How much tax do you pay on TSP withdrawal?
Because we’re making the payment directly to you and not to your other retirement plan or IRA, we are required to withhold 20% of your payment for federal income taxes. This means that in order to roll over your entire payment, you must use other funds to make up for the 20% withheld.
How do I avoid paying taxes on my TSP withdrawal?
If you want to avoid paying taxes on the money in your TSP account for as long as possible, do not to take any withdrawals until the IRS requires you to do so. By law, you are required to take required minimum distributions (RMDs) beginning the year you turn 72.
How much can I withdraw from TSP?
$1,000You cannot withdraw less than $1,000. (including money you may have transferred into the TSP from IRAs or eligible employer plans) and the earnings on those contributions.
What states do not tax TSP withdrawals?
The no-income-tax states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.