[Reduction in Force] Part 22: How Can I Access My Thrift Savings Plan (TSP)?

00:08:52
https://www.youtube.com/watch?v=ynTmmNoRgX0

概要

TLDRIn this episode of the FED Impact podcast, Chris Kallik discusses the Thrift Savings Plan (TSP) for federal employees, detailing what happens to TSP accounts when employees leave government service. He explains the 30-day waiting period for accessing funds, the IRS penalties for early withdrawals, and special rules for certain categories of employees like law enforcement officers. The episode emphasizes the importance of consulting financial professionals for managing TSP accounts and highlights options for moving or keeping TSP funds after separation. Listeners are encouraged to attend workshops for more detailed information on TSP and retirement planning.

収穫

  • 💼 TSP is crucial for federal retirement planning.
  • ⏳ There's a 30-day waiting period after separation to access TSP funds.
  • ⚖️ Early withdrawals before age 59.5 may incur a 10% penalty.
  • 👮 Special rules apply for law enforcement officers and similar roles.
  • 📞 Consult a financial professional for TSP management advice.
  • 🏦 You can keep your TSP account after leaving federal service.
  • 💰 Outstanding loans can still be paid after retirement without penalties.
  • 📚 Attend workshops for comprehensive TSP and retirement information.

タイムライン

  • 00:00:00 - 00:08:52

    In this episode of the FED Impact podcast, Chris Kallik discusses the Thrift Savings Plan (TSP) and its implications for federal employees upon separation from government service. He emphasizes the importance of understanding how TSP works, including the 30-day waiting period after separation for access to funds. Chris explains the IRS rules regarding penalties for early withdrawals, particularly highlighting that employees aged 55 or older can access their TSP without penalties if they separate in the year they turn 55. Special categories of employees, such as law enforcement officers and firefighters, have additional access privileges. Chris encourages listeners to consult financial professionals for guidance on managing their TSP and clarifies that employees are not required to withdraw their TSP upon leaving federal service. He also mentions the option to continue loan payments after retirement, which helps avoid taxable distributions. Finally, Chris invites listeners to attend workshops for more comprehensive information on TSP and federal benefits.

マインドマップ

ビデオQ&A

  • What happens to my TSP account when I leave government service?

    You can access your TSP account after a 30-day waiting period regardless of how you separate from service.

  • Are there penalties for withdrawing from TSP before age 59 and a half?

    Yes, there is typically a 10% early withdrawal penalty unless you separate from service in the year you turn 55.

  • Can I continue to make payments on an outstanding TSP loan after retirement?

    Yes, you can continue payments on an outstanding loan even after you retire.

  • Do I have to take my TSP out when I leave federal service?

    No, you are not required to remove your TSP funds after leaving federal service.

  • What should I do if I want to move my TSP account?

    You can move your TSP account, but it's advisable to consult a financial professional to understand the implications.

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  • 00:00:01
    most federal employees have spent their
  • 00:00:03
    entire career contributing to the Thrift
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    Savings Plan and so it's no wonder that
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    they ask themselves what happens to this
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    account when I leave government service
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    whether it's in a regular environment or
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    in a reduction in force environment
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    where early outs discontinued servants
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    separate packages cash buyouts all of
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    that is happening how does it change the
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    access that you have to the
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    tsp hi I'm Chris kallik of profeds and
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    welcome to the FED impact podcast where
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    we offer candid insights on your federal
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    retirement so I know tsp is a huge piece
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    for so many of you and frankly it's the
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    part of your retirement that you have a
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    whole lot of control over with respect
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    to how much you're contributing how it's
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    going to be taxed on the way in and on
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    the way out and how it's performing
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    based on where you have it invested so
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    tsp is a huge part of your retirement
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    plan and so we want to make sure that
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    you have access to that now after you
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    have separ ated from government service
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    regardless how you separate the tsp
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    doesn't care they don't delineate
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    between you retiring you quitting you
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    being fired resigned whatever whatever
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    you want to call it tsp doesn't care
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    you're either employed or you're not so
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    once you're not you have a 30-day
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    waiting period and this period is
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    designed for your agency to be able to
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    notify the office of personnel
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    management that you are in in fact in a
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    retirement status or in a separated
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    status okay and that way tsp knows to
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    unlock some of the access opportunity
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    that you have for your account there are
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    some things that you're allowed to do
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    while you're still employed and other
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    things that you have to wait for until
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    you've actually separated from service
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    and so that 30-day window is designed
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    for your agency to be able to have the
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    time to let tsp know now why it takes 30
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    days these days I'm not really sure and
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    frankly I've seen withdrawals be able to
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    happen within that 30 days it's all a
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    matter of you going through all the
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    effort to initiate a withdrawal and it
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    getting kicked back from TSP because you
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    put it in a little too soon and they
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    hadn't quite receive the notice from
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    your agency okay so lots of different
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    ways that you can access the tsp I'm not
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    going to bore you with those details you
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    can take monthly payments quarterly you
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    can take all of it at one time you can
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    take a little bit here and there all
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    sorts of ways that you can access your
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    tsp um but here's the thing I want to
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    talk about today and that is penalties
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    let's start with the normal rule that
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    the IRS has for accounts like this the
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    IRS wants you to leave accounts like
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    this alone until you've reached the age
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    of 59 and a
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    half okay so once you are separated from
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    service which is the nature of this
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    episode you have separated from service
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    and now the question is can you access
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    the tsp the answer is
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    yes but there very well may be a penalty
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    based on this IRS Rule now there are
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    some special rules assigned to 401K
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    plans like the Thrift Savings Plan in
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    this case the government says is or
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    really the IRS says as long as you
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    separate or retire from government
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    service in the calendar year and which
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    you turn 55 or older you are allowed to
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    access your tsp and not have any penalty
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    if you do have a penalty it will be a
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    10% early withdrawal penalty which means
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    all the money that you take out of the
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    tsp you will pay an extra 10% on top of
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    that that you don't ever get
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    back okay and so the way to avoid it
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    with respect to being a federal employee
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    is you reaching the calendar year in
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    which you turn 55 or older for you
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    separating from service not taking the
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    money separating from service that is
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    what unlocks That Special Rule with the
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    IRS okay otherwise if you if you leave
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    at you know
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    52 you are going to have a penalty on
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    everything you take from your tsp all
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    the way to 59 and a half that's the way
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    that penalty works so very important
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    that we understand how that works and
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    how it doesn't work now there are many
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    of you listening who are part of a
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    special category of employees these are
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    our Law Enforcement Officers
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    firefighters and air traffic controllers
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    you know you have some special rules to
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    access the tsp essentially as long as
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    you are eligible to retire under one of
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    those special categories you are
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    eligible to draw money from the tsp
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    without penalty okay so for instance a
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    law enforcement officer who is 50 with
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    20 years of service they are eligible to
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    retire under a law enforcement pension
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    that automatically makes them eligible
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    to draw from the tsp without penalty so
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    great opportunity of course we want to
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    make sure we're not dwindling that
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    account away too quickly but great
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    opportunity for those special categories
  • 00:05:13
    of people now there are other ways to
  • 00:05:16
    avoid the penalties and someone's going
  • 00:05:18
    to comment on This I Promise so we're
  • 00:05:20
    going to link in the show notes to the
  • 00:05:22
    other ways to avoid the penalty it kind
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    of gets more into the details of the
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    rules of all of this uh that aren't
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    necessarily appropriate for this
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    particular video but I definitely want
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    to make sure that the the access to that
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    list is available for anybody who's
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    curious and make sure that you know the
  • 00:05:42
    ways to be able to avoid those penalties
  • 00:05:45
    so then the question is can I move the
  • 00:05:48
    tsp the answer is yes you're allowed to
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    move that account if that's what you
  • 00:05:52
    wish to do now there might be some
  • 00:05:54
    advantages and disadvantages to doing so
  • 00:05:56
    so it's super important that you're
  • 00:05:58
    talking with a financial professional
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    Prof who actually understands how these
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    things work so you don't make a silly
  • 00:06:03
    mistake and cost yourself a lot in taxes
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    so please seek some help if you're if
  • 00:06:09
    you're curious how to get that type of
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    help let us help you uh I would I would
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    be delighted to make an introduction to
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    a financial professional who uh handles
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    this type of work and uh make sure that
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    you're you're making these decisions
  • 00:06:23
    with your eyes wide open okay next can I
  • 00:06:27
    leave it in the tsp a lot of people
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    think I'm not sure where they got this
  • 00:06:32
    but they have this idea that once they
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    leave Federal service they have to take
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    their tsp out and that's not true again
  • 00:06:39
    there might be some good reasons to get
  • 00:06:41
    it out of the tsp but you are not
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    required to remove it now in the event
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    that you have an outstanding loan you
  • 00:06:49
    have the chance to be able to continue
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    payments on that loan even as a retiree
  • 00:06:55
    now this was a new rule just a couple
  • 00:06:57
    years back that changed it used to be if
  • 00:07:00
    you had an outstanding loan the moment
  • 00:07:02
    that you retired that became a taxable
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    distribution of any of the outstanding
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    balance that is no longer the case and
  • 00:07:09
    so you have a chance to Simply continue
  • 00:07:11
    those payments and as long as you do
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    that you will not have a taxal event in
  • 00:07:18
    the form of that loan okay all right boy
  • 00:07:22
    there's so much to think about and I'm
  • 00:07:25
    just touching the wave tops of tsp here
  • 00:07:27
    there's so much to think about with
  • 00:07:28
    respect to tsp in retirement or after
  • 00:07:31
    you've separated from federal service to
  • 00:07:34
    get the full scoop on tsp and how all
  • 00:07:37
    the little details where I hope you'll
  • 00:07:39
    get to one of our workshops of course
  • 00:07:40
    tsp is a big topic that we discuss in
  • 00:07:43
    that Workshop uh we cover all of the
  • 00:07:46
    pieces of the pension and all the
  • 00:07:48
    insurance programs Social Security all
  • 00:07:50
    the the facets of your government
  • 00:07:52
    benefits and of course tsp being one of
  • 00:07:55
    them so if you need to get to one of
  • 00:07:57
    those workshops you can can either visit
  • 00:08:00
    our site at fed impact.com or you can
  • 00:08:03
    pull out your phone and text the word
  • 00:08:06
    podcast to
  • 00:08:09
    224444
  • 00:08:10
    6144 and we will get connected you'll
  • 00:08:13
    have an instant access to all of our
  • 00:08:15
    training materials including our
  • 00:08:17
    in-person workshops and be able to get
  • 00:08:20
    the training that you need to feel
  • 00:08:21
    really prepared to retire I hope this
  • 00:08:24
    episode and this Series has been helpful
  • 00:08:27
    to you to be able to get a lot of
  • 00:08:28
    questions answered
  • 00:08:30
    of course with a wide variety of federal
  • 00:08:32
    employees there are bound to be
  • 00:08:33
    additional questions so I hope that this
  • 00:08:36
    put you in the right direction to get
  • 00:08:38
    you exactly what you needed today so be
  • 00:08:40
    sure to subscribe to this podcast
  • 00:08:42
    wherever you might listen to podcast and
  • 00:08:44
    that way more of the content that we're
  • 00:08:47
    producing on a regular basis for federal
  • 00:08:49
    employees shows up on your feed
タグ
  • Thrift Savings Plan
  • TSP
  • Federal Employees
  • Retirement
  • IRS Penalties
  • Financial Planning
  • Government Service
  • Early Withdrawal
  • Loan Payments
  • Workshops