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Thread: TSP Withdrawal Options Bill Introduced

  1. #1

    Default New TSP Withdrawal Options Legislation Introduced

    New Legislation on TSP Withdrawal Options Introduced in the Senate

    Senators Introduce Legislation on TSP Withdrawal Options — (April 7, 2017) At the TSP’s request, Senators Rob Portman and Tom Carper introduced a bill, S. 873, which would eliminate current statutory restrictions on participants’ withdrawal options. The bill would eliminate the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. It would also permit multiple post-separation withdrawals. Additionally, the bill would allow multiple age-based withdrawals while a participant is still working. Participants would also be able to stop monthly payments and elect to purchase an annuity while receiving monthly payments.
    https://www.tsp.gov/whatsnew/Content/index.html#options


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  3. #2

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    Now give us one or two more monthly IFT's and it would be a win-win.
    May the force be with us.

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  5. #3

    Default Re: New TSP Withdrawal Options Legislation Introduced

    I do wish that they would make it so that you can withdraw from a single fund rather than all of them equally. It would be great to withdraw only from the G Fund and leave money in stocks funds alone.

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  7. #4

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    Quote Originally Posted by Happy_Trails View Post
    I do wish that they would make it so that you can withdraw from a single fund rather than all of them equally. It would be great to withdraw only from the G Fund and leave money in stocks funds alone.
    Happy_Trails, Nice idea but it could be difficult to manage. First you would have to have that amount of money you want to withdraw in the "G" fund or you would have to use an IFT to move that amount of money into the "G" fund. I will be corrected if I'm wrong but the funds are withdrawn according to how you have your money distributed in your TSP. If you have 100% "C" fund then your withdrawal comes out of the "C" fund but if you are 50-50 "CS" then it is taken out 50-50.
    May the force be with us.

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  9. #5

    Default Re: New TSP Withdrawal Options Legislation Introduced

    More:

    Legislation Could Loosen Restrictions on TSP Withdrawals

    The stringent withdrawal rules on the Thrift Savings Plan (TSP) have affected NTEU members for years. This year, with bipartisan support in the Senate, a bill has been introduced allowing active federal employees to make multiple age-based withdrawals from their TSP accounts. Supported by Senators Rob Portman (R-Ohio) and Tom Carper (D-Del.) employees would still remain eligible for partial withdrawals once retired. The bill also allows employees receiving monthly payments to change the amount and frequency of their payment at any time instead of only once during the year.

    In 2013, TSP participants who no longer worked for the federal government transferred $9 billion out of the TSP to other institutions. According to a TSP-conducted survey, 27 percent of employees cited a desire for greater flexibility with payments and withdrawals. Under the current statute, federal employees who wish to make age-based withdrawals can only do so while they are employed and cannot make a partial withdrawal once they leave government. Employees who have left government and not made any age-based withdrawals can make one partial post-separation withdrawal, but then must move to full withdrawal options. The withdrawal rules have not been changed since the TSP was established in 1986.

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  11. #6

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    Hopefully, changes to TSP withdrawal rules for post-separation employees will include the ability to make changes to monthly withdrawal amounts throughout the year, and not just for a limited time at the end of each year. The current system is antiquated at best.

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  13. #7

    Default Re: New TSP Withdrawal Options Legislation Introduced

    It's a start!

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  15. #8

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    Quote Originally Posted by nasa1974 View Post
    Happy_Trails, Nice idea but it could be difficult to manage. First you would have to have that amount of money you want to withdraw in the "G" fund or you would have to use an IFT to move that amount of money into the "G" fund. I will be corrected if I'm wrong but the funds are withdrawn according to how you have your money distributed in your TSP. If you have 100% "C" fund then your withdrawal comes out of the "C" fund but if you are 50-50 "CS" then it is taken out 50-50.
    Quote Originally Posted by Happy_Trails View Post
    I do wish that they would make it so that you can withdraw from a single fund rather than all of them equally. It would be great to withdraw only from the G Fund and leave money in stocks funds alone.
    The withdraw from a single fund is one issue. For me, the bigger issue is we can't take only from Roth or Traditional TSP. And the related one....We can't have different fund %'s in Roth and Traditional.

    In my outside IRA's, I put more aggressive stocks/funds in my Roth. If I hit it big, it is Tax Free (eg TESLA). And I can decide whether to withdraw from Roth or Traditional, depending on my tax status (tax diversification). So although softening up on the withdrawal requirements is a step in the right direction, I will still take my $$ out of TSP when I retire, and move to outside IRA's.
    In fact, if they do ease the withdrawal rules to allow more in-service withdrawals, I may start moving it out BEFORE I retire!!
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Target Retire date: December 2018.

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  17. #9

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    Quote Originally Posted by uscfanhawaii View Post
    The withdraw from a single fund is one issue. For me, the bigger issue is we can't take only from Roth or Traditional TSP. And the related one....We can't have different fund %'s in Roth and Traditional.

    In my outside IRA's, I put more aggressive stocks/funds in my Roth. If I hit it big, it is Tax Free (eg TESLA). And I can decide whether to withdraw from Roth or Traditional, depending on my tax status (tax diversification). So although softening up on the withdrawal requirements is a step in the right direction, I will still take my $$ out of TSP when I retire, and move to outside IRA's.
    In fact, if they do ease the withdrawal rules to allow more in-service withdrawals, I may start moving it out BEFORE I retire!!
    When I retired I left my money in TSP only because I didn't plan to take anything out until I turn 70 and I felt I had a better chance to make more that 7-10 percent per year. However, I won't leave it in TSP when I decide to start taking out a monthly sum.
    May the force be with us.


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  19. #10

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    This may be sold news for some, but I was reading the article posted on the TSPTalk home page from Federal Inside "TSP moves to expand investment, withdrawal options".
    https://www.washingtonpost.com/news/...=.508920c29b4a
    Some interesting insight into the mindset of Greg Long and the board, and why the percentage of retirees leaving TSP has increased from 41% to 55% since legislation was passed in 2009 regarding expanded investment window options. Now, let that sink in for a second.
    The legislation authorizing the TSP Board to expand investment options passed 2009. And yet we're still waiting for them to act on it. And then read some of the statements from Long and the Board, and it becomes crystal clear (at least for me) why we're stuck with the current state of investment and withdrawal options. (Now, also bear in mind this article was written 2 years ago, and yet we still wait for them to act. Keep that in mind when you read these statements rom the article).
    Apparently, a great deal of TSP participants don't agree that the TSP currently has a more "advantageous design".
    Time to do something Mr. Long. You've had 8 years.
    Just thinking out loud.

    The TSP presented to the board a report spurred by a finding that 41 percent of investors who left the government in 2012 transferred their money out of the TSP within a year, rather than leaving it in place as is allowed. At the May briefing, officials added that percentage since has increased to 55.
    TSP executive director Greg Long said that by transferring the money out, account holders are giving up the low administrative fees they pay in the TSP and paying much higher fees to the IRA provider.
    “These are big dollar amounts generally going into IRAs,” he said. “We have an advantageous design, yet we have a substantial amount of dollars leaving to what appears to be a less advantageous design.”
    He added: “It’s not about asset accumulation [in the TSP]. I don’t care about that. What I care about is outcome” for investors who end up paying more in account fees outside the program.






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  21. #11

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    Default New TSP Withdrawal Options Legislation Introduced

    For the record, Greg Long is leaving the TSP. I read that last week. His last day is May 5.

    https://federalnewsradio.com/tsp/201...fter-10-years/

    He's been there ten years, and still doesn't get it.

    Don't let the door hit you on the way out, Greg.


    Sent from my iPhone using TSP Talk Forums

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  23. #12

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    Default Re: New TSP Withdrawal Options Legislation Introduced

    You made my day James.
    Thanks.
    But, I'll still keep my framed "Cease and Desist" letter from Greg Long and the Board preceding the change to the 2 IFT rule.
    Ah, the days of unlimited IFTs. Good Times!

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