Here's what's new:
- The option to take monthly, quarterly and annual installment payments;
- Ability to take unlimited post-separation, partial withdrawals;
- Ability to take partial withdrawals and installment payments simultaneously;
- Option to choose the source of withdrawal payments, including traditional, Roth or both;
- Up to four age-based, in-service withdrawals at age 59-and-a-half or older; and,
- An end to contribution suspensions if a participant takes a hardship withdrawal.
"They're going to really encourage federal employees who are still working — if they're over 59-and-a-half and also those who have left federal service, whether they've resigned or retired — the ability to manage their TSP in retirement by leaving it there rather than having to move it to an [individual retirement account] IRA or some other place to have the flexibility that they have wanted," Tammy Flanagan, a federal retirement benefits specialist, said in an interview on the Federal Drive with Tom Temin
Yes the TSP begrudgingly made the withdrawal process more flexible under the TSP Modernization Act. The flexibilities TSP has compared to commercial withdrawal options is still way a lot to be desired. Add that to the inflexible way they treat your assets for RMD and if you are doing a Roth option, there really is no reason to stay. Each person needs to do the research and make their own informed decision with what they are comfortable with.
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