Partial Withdrawal and Monthly Payment

Managing your TSP and alternate investment options after retirement or separation from service.

Moderator: Aitrus

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poke1647
Posts: 1
Joined: Mon Nov 15, 2021 3:00 pm

Partial Withdrawal and Monthly Payment

Post by poke1647 »

I've decided to make a partial withdrawal after leaving my agency. I know there will be a default 20% withholding but what I'm trying to understand is if I chose to do installment payments over the next 12 months, would I be taxed on each monthly payment (a mandatory 20% tax withholding??)?

rockhard
Posts: 15
Joined: Wed Aug 10, 2016 2:03 pm

Re: Partial Withdrawal and Monthly Payment

Post by rockhard »

Yes, each month’s payment will have the default 20% deducted.

Jmk
Posts: 13
Joined: Thu Jan 11, 2018 12:24 am

Re: Partial Withdrawal and Monthly Payment

Post by Jmk »

rockhard wrote: Mon Nov 15, 2021 9:24 pm Yes, each month’s payment will have the default 20% deducted.
This is not necessarily true. You can set up equal monthly payments in any amount. If the amount in your account allows those payments to last 10 years or longer, you can select the amount of taxes withheld (there is a default, married w/ 3 dependents, but you can change it). So, say you want $3K/month, 36K/year. If you have a $360K+ balance, you are allowed to select your withholding. Then, you can change or cancel these payments at any time. Make sure you read the TSP booklet Withdrawing From Your TSP Account.

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Fund Prices2021-11-26

FundPriceDayYTD
G $16.71 0.01% 1.24%
F $20.92 0.78% -1.29%
C $69.26 -2.27% 23.88%
S $84.86 -2.44% 14.36%
I $37.89 -2.19% 7.07%
L2065 $14.44 -2.24% 16.31%
L2060 $14.44 -2.24% 16.31%
L2055 $14.44 -2.24% 16.31%
L2050 $29.27 -1.79% 13.42%
L2045 $13.35 -1.67% 12.66%
L2040 $48.68 -1.56% 11.93%
L2035 $12.85 -1.43% 11.06%
L2030 $42.73 -1.31% 10.19%
L2025 $12.07 -0.95% 8.13%
Linc $23.29 -0.47% 4.52%

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Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".