Changes coming in mid-September will allow participants more flexibility in how they take money out of their retirement savings accounts.
The federal government’s 401(k)-style retirement savings plan late Thursday shared more information about upcoming changes that will give participants greater flexibility for making withdrawals from their accounts.
New withdrawal options authorized under the 2017 Thrift Savings Plan Modernization Act (H.R. 3031) will be available starting on Sept. 15, according to the fact sheet. Withdrawal requests under the old system must be completed by the end of the day on Sept. 6, and then there will be a period from Sept. 7 through Sept. 14 when participants cannot make withdrawal requests to allow time for the transition to the new options, TSP noted.
The fact sheet emphasized that the changes are only adding options. “We’re not taking anything away,” TSP said. “You may want to wait until September 15 or later to request your withdrawal so that you can take advantage of more flexibility and use new, more efficient online tools to initiate your request.”
The new flexibilities that will be available in September include:
- The ability to make multiple post-separation partial withdrawals;
- Civilians and military service members who are 59.5 years or older can take up to four in-service withdrawals annually;
- Withdrawals can come from Roth or traditional accounts, or a “proportional mix” of both;
- Participants separated from federal service will be able to choose monthly, quarterly or annual payments; and,
- Participants can “stop, start, or make changes to your installment payments at any time.”
For more detailed information on these and other new withdrawal options, read TSP’s fact sheet.
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