TSP Modernization Act of 2017

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The TSP Modernization Act of 2017, which became law on November 17, 2017, will provide for more flexible withdrawal options for Thrift Savings Plan participants. The TSP plans to roll out these changes in September, 2019.[1]

The TSP states[2]:

The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. It also removes the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. Though it has no effect on required minimum distributions mandated by the Internal Revenue Code, the law also allows separated participants who are over age 70½ to remain in the TSP, eliminating the requirement to make a withdrawal election on an entire account balance. Participants will also be able to stop monthly payments, change payment frequency, or elect to purchase an annuity while receiving monthly payments.

The Executive Director of the Federal Retirement Thrift Investment Board (FRTIB) has the authority to establish parameters regarding this new ability to take multiple withdrawals, and the law gives the FRTIB up to two years to make the regulatory and operational changes necessary to enact these changes.


Withdrawal Account Percentages

According to the TSP, "[I]n addition to the changes made by the new law, we’re also adding the ability to specify how much of your withdrawal should be Roth and how much should be traditional; withdrawals currently come out pro rata from both sources."[3]


The FRTIB (Federal Retirement Thrift Investment Board) has up to two years to implement the changes.

Until the changes have been made, some details on the following wiki pages may be in flux:


  1. tsp.gov (30 May 2018). "TSP: Plan News and Announcements". tsp.gov. Retrieved 12 October 2018. Updated information about changes to TSP withdrawal options — (May 30, 2018) A fact sheet about planned improvements to TSP withdrawal options has been updated to provide more details about the TSP’s plans. Questions and Answers about Changes to TSP Withdrawal Options file includes summaries of the changes coming in September 2019, in addition to background on the TSP Modernization Act of 2017, which mandates some of the new withdrawal options.
  2. "TSP: Plan News and Announcements". tsp.gov. 2017-11-20. Retrieved 2017-11-23. The TSP Modernization Act of 2017 will provide TSP participants with more flexible withdrawal options.
  3. "Questions and Answers about Changes to TSP Withdrawal Options" (PDF). tsp.gov. Retrieved December 19, 2017.

External links