Ask The Experts: Money Matters

By Mike Miles

Closing TSP account

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Q. I have $100,000 in my Thrift Savings Plan account. What will I receive, after early withdrawal penalties, if I close the account?

A. The minimum federal tax withholding is 20 percent, but you can elect a higher rate, so the maximum you’ll receive is $80,000. The early withdrawal penalty won’t be due, along with whatever tax you actually owe on the withdrawal, until you file your taxes in April of the year following the year of the withdrawal. See the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for details.

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