If you leave federal service, you can't make any more contributions, but you can withdraw the remaining funds or transfer your balance to an IRA or new employer's plan.
I was just about to take out $5,000 Loan from my TSP. I am 35 years old and Federal employee 5+ years and probably will be working for another 20-30 years. My question is: Can i continue to make TSP contributions while I am paying back my TSP Loan? I had 2 different people tell me that contributions must stop while I have a Loan balance on my TSP account, but i cant find that anywhere in writing.
You can continue to make TSP contributions with a loan balance. Your payroll will take two separate deductions from your bi-weekly pay - one for your contributions and the other for your loan repayment. Some people may choose to lower or stop contributions due to the loan repayment amount, but you're not forbidden from making contributions.
No your contributions don’t stop and on top of that you will make additional payments for the loan plus a little interest. But it is nice that is interest your paying to yourself.
Based on your role, you should qualify for the Rule of 55 exception for public safety employees. This allows you to avoid the 10% penalty at age 50 or at any age with 25 years of service.
Sir can you take out money from your TSP is you retire this year, reached minimum retirement age and are 58 while still working.....but going to retire later in this year? Or do you have to wait until you actually retire and no longer work? If the penalties happen during tax time, it would seem that you could withdrawal anytime during the year in which you retire, correct? It all comes out in the wash, so to speak. Thanks for what you do!
I will be retiring from the Air Force in 6 months. I want to clear out my TSP to pay off a few loans so I will be debt free on day 1 retirement. Is this something that can be done? I'm aware that there is 10% tax on the taxable income, and I am fine with that as the non taxable + taxable is enough to cover my loans. I would like to do it before I separate as the money I am paying towards the loans could be put towards a savings/another investment system.
You can't withdraw money from your TSP until you retire if you're under 59.5 years old unless you can attest to a financial hardship. Around 30 days after retiring, you can take the money directly from your TSP and 20% will be withheld for federal taxes. Or, you can move the funds to an IRA and make withdrawals from there. With an IRA, you generally have more flexibility in managing upfront tax withholdings. The 10% early withdrawal penalty would not apply until you file your tax return.
Just so I understand what you said about the rule of 55. I left Federal Government at age 54 with a medical disability. So I am not eligible for the rule of 55? Correct?
Yes, generally you're not eligible at age 54 unless you're turning 55 in your retirement year, (i.e you retire in June at 54 but will turn 55 in August). Also, some people on medical disability can claim an exemption to the early withdrawal penalty.
@@Virginiais4loversit’s not a rude comment. The info is valuable but the poor acoustics are distracting. There are ways for him to improve his audio and then probably in turn grow a bigger audience
@@khalijohnson9466 Did he ask for your expert advice? If it wasn't solicited, it comes off as rude. Maybe that wasn't your intention but it still came off that way.
@@Virginiais4lovers I didn’t make the original comment. The channel owner replied to the original comment in a seemingly receptive manner. It’s not rude to make a constructive criticism. But even so, the original comment is more of an observation. You’re not seeming to say that “there’s no issue with the acoustics.” You’re just seeming to say “it’s rude to point out the issue with the acoustics”……okay. I’m not even the original commenter. I just agree with the original commenter. I don’t personally care if the channel owner changes the acoustics or not
