Legislation recently introduced in the Senate to allow federal employees to take multiple withdrawals from their Thrift Savings Plan accounts has been reported out of the Senate Homeland Security and Governmental Affairs Committee to be considered by the Senate as a whole.
The TSP Modernization Act of 2017 (S. 873) was introduced by Senators Rob Portman (R-OH) and Tom Carper (D-RI) and would allow TSP participants to do the following:
- Make multiple age-based withdrawals and subsequent post-separation partial withdrawals
- Make full withdrawals via periodic payments
The bill would also eliminate the withdrawal election deadline which currently requires TSP participants to make a post-separation withdrawal election by April 1 of the year following the year in which they turn 70 1/2 and are separated from federal service.
Under current law, TSP participants are limited to one withdrawal from their accounts while in federal service upon reaching the age of 59 1/2 (age-based withdrawal), and participants who leave federal service can make only one withdrawal of a portion of the balance in their account (post-separation withdrawal).
For more information, see Legislation Would Expand TSP Withdrawal Options.