Prepared to withdraw funds from your Thrift Savings Plan? Here's what might have slipped your notice

In the final stages of your federal career, it's essential to understand how your Thrift Savings Plan (TSP) works post-retirement. Here are some key points to keep in mind:

Traditional TSP withdrawals are subject to income tax.
If you withdraw from TSP before age 59.5, you may also have to pay an early withdrawal penalty tax, which is generally 10% of any taxable portion of the distribution or withdrawal not rolled over.
However, employees who retire before age 62 with an unreduced FERS basic retirement benefit are entitled to a FERS Special Retirement Supplement, and the additional 10% tax does not apply if you separate from service during or after the year you reach age 55, unless you are a public safety employee. Public safety employees may be exempt from the early withdrawal penalty tax after separating from service at age 50 or after 25 years of TSP service.
It's crucial to ensure the TSP has your current address after leaving federal service.
Your investment in the TSP will continue to be allocated according to your designated way.
If you have TSP loans, you must decide whether to pay them off, keep them open and set up monthly payments, or allow them to be foreclosed and accept the outstanding balance and accrued interest as taxable income.
The Rule of 72 can help estimate the time it takes for your money to double based on the anticipated rate of return.
Installment payments over your life expectancy can help avoid the early withdrawal tax penalty.
Before making a post-separation withdrawal election, consider delaying your request if you don't need the money, especially if you plan to go back to work after retiring.
Only the account holder or authorized representatives can make changes to their TSP account after leaving the federal government.
The early withdrawal tax penalty can be applied retroactively if you stop, switch, or take additional distributions within five years of beginning installments or before reaching age 59.5, whichever comes later.
The Federal Employee's Retirement System (FERS) consists of three parts: FERS Basic Retirement Benefit, Social Security, and the Thrift Savings Plan (TSP).
Once you leave the federal government, you will no longer be able to make employee contributions to your TSP account.
VERA and DSR retirements when retiring under age 55 are not exceptions to the 10% early withdrawal penalty tax.

To fully understand your options and their consequences, it is recommended to read the TSP booklets "Distributions" and "Tax Rules about TSP Payments."