The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal Employees and uniformed service members. It offers you the same type of tax savings and benefits as private sector 401k plans. The Federal Retirement Thrift Investment Board acts as the plan administrator.
Once eligible (either via Age-Based Withdrawal or separation from service), you can Rollover, or Transfer, your TSP funds into a Traditional IRA (or Roth IRA if you have contributed to the Roth portion of TSP).
A TSP Rollover offer your several advantages:
You may make three types of withdrawals from your TSP: In-Service withdrawals, Age-Based withdrawals and withdrawals upon Separation or Retirement.
You can make an age-based in-service withdrawal anytime after you reach age 59½ as long as you are actively employed in Federal service. The following conditions govern age-based withdrawals:
Withdrawals After Leaving Federal Service
When your service ends, you have essentially five withdrawal choices:
TSP Loan Options – Borrowing Money From Your Account
You may make two types of loans from your TSP: General Purpose Loans & Residential Loans.
Can only be made by participants who are still employed by the Federal Government.
The amount of the loan regardless of type must be at least $1,000 and cannot exceed the amount of the federal employee’s own contributions plus earnings.
TSP-20 form is used for either loan option. Applications can also be completed at www.TSP.gov.
Generally, re-payments are made via payroll deduction.
General Purpose Loan:
Can be made for any purpose. No documentation is required.
Must be repaid with interest within 5 years.
May only be used for the purchase or construction of a primary residence.
This loan requires documentation.
Must be repaid within 15 years.
TSP will declare your loan a taxable distribution on the entire unpaid balance in the following situations: