Tsp hardship withdrawal reddit. Now let's switch gears and discuss your 401(k).

Tsp hardship withdrawal reddit I did a TSP hardship withdrawals can be a lifeline in times of financial distress, but they come with significant risks and drawbacks. Archived post. I You can do an in-service withdrawal, but that could subject you to taxes and other penalties. After the agency declined to process my request for a reasonable Withdrawing from TSP Can you do this at any time, or do you have to be separated from federal service (or have a hardship)? Before you tell me that it's a stupid idea, I understand all the penalties and downsides associated. . If you're experiencing a financial emergency, a hardship withdrawal might allow you to take money from your 401(k) before age 59½. G fund is unique to the TSP, while it pays low it is stable. There are complicated rules with withdrawing from retirement accounts early, some to include if you withdraw to transfer to another investment fund and don’t you can be taxed a penalty of 10% on top of any income tax. If your employer offers a 401k plan it's great to use it, but once you leave that company you should move your money out. Top 3% Rank by size . I requested a hardship withdrawal stating my late mortgage (30 days) and my inability to pay it without this withdrawal. When she does die my family can inherit my TSP. I need to request a hardship withdrawal but the CSRs View community ranking In the Top 5% of largest communities on Reddit. If so, did you roll it over to an IRA account and then subsequently perform a Roth conversion during your first year of retirement. What is the best way to start withdrawing from my TSP. This is the way it should have been all along even though the TSP CSRs were insisting to me that the system was working correctly and that I HAD to take a minimum of $7100/month. If your money is in a Traditional TSP (you didn't pay tax during contribution) then the 10% plus taxes applies to all money withdrawn early (as in before the age of 59. I made a hardship withdrawal from my TSP account in June 2022. To answer your original question, you do need to provide documentation for a hardship withdrawal. Beyond that, you can take loans that you have to pay back. I am approaching my EAS (March 5th) to dedicate more time to my business. I requested it via check (in hindsight a huge mistake). These changes take effect on September 15, 2019. You'll work yourself into even more hardship that way with ridiculous (and real) 39% interest rates and the like. I am going TSP Hardship Withdrawals. That way your TSP account will stay open if you ever take another government job, or if you ever decide to roll money from an outside IRA into it. This is why when the Roth TSP first came out people were so reluctant to get it. As an alternative, you could consider a TSP loan. The IRS is experiencing significant If I go through the TSP Hardship withdrawal page and enter that I want to withdraw my entire balance, it says roughly $3,600 will be withheld for federal withholding. If the Hardship Withdrawal is the only way, do I absolutely have to submit a financial worksheet, and supporting documents for "financial hardship Get the Reddit app Scan this QR code to download the app now. Debt I have a Vanguard plan and blew my emergency fund. I believe you have up to 3 years to pay back any taxes owed on an TSP COVID Hardship withdrawal Reply reply Reddit's home for tax geeks and taxpayers! News, discussion, policy, and law relating to any tax - U. Now let's switch gears and discuss your 401(k). I have taken a hardship withdrawal in the past and I can help you if it’s the choice you’ve made. The issue still stands as of 2024. And I make $2400 a month. My TSP doubles my money right away with the match. New comments cannot be posted and votes cannot be cast. You're subject to income taxes and a 10% penalty. 14 votes, 21 comments. Reddit's hub for I am trying to withdrawal my TSP using hardship. Or check it out in the app stores TSP hardship withdrawal for divorce legal fees - is there a 10% penalty? but it’s easier to just take some out of the hardship withdrawal. Share I'm with you. The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. and International, Federal, State, or local. Also, the notion that the past four years, you weren't satisified with TSP performance is odd. You need to fix your situation today instead of A thrift savings plan (TSP) hardship withdrawal allows federal employees and members of the uniformed services to access their retirement funds in times of severe financial Hardship Withdrawal . I help them too. When I got to the "withdrawals and rollovers" section there doesn't seem to be any option other than to initiate a Can you do this at any time, or do you have to be separated from the USPS (or have a hardship)? Also, to my understanding, they take back the 1% if So here's my point. More specifically you can request a hardship withdrawal, but that has specific rules and limitations plus an actual hardship happening to you. Please reach out to your command or financial rep. The agent on the phone asked me a series of questions relating to expenses incurred relating to my situation, and at the end said I didn't meet the criteria to allow me to get a withdrawal. Straightforward post. subreddit that is intended to provide info and advice to Federal Civilian and military employees who contribute to the TSP as part of their retirement plan. Rules and requirements for workplace account hardship withdrawals may vary by plan. Hi everyone, longtime lurker. You will then be held accountable for the early withdrawal fee for the remaining balance and any tax liability that comes with an early disbursement. “Early Withdrawal Penalty Tax If you receive a TSP distribution or withdrawal before you reach age 591⁄2, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10% of any taxable portion of the distribution or withdrawal not rolled over. TSP is for your retirement, don't touch it until you retire. didn’t do a loan because as i stated earlier i’d rather just pay taxes and get it over with, vs being forced to pay a 25k loan TSP hardship withdrawal withholding . The TSP will withhold 10% of the taxable portion of your withdrawal for Federal income tax unless you increase or waive the amount of withholding. get reddit premium. Or check it out in the app stores   TSP Withdrawal question ( 20% withholding explain?) DISCUSSION I'm trying to take a partial distribution from my tsp (10k) but on the site they have an "automatic" 20% withholding fee. I negotiated the tax payment for the early withdrawal Yes you will both get taxed for early withdrawal but you can negotiate who pays the tax. I did a hardship withdrawal from my TSP for 10k on 5 July and it was approved on 8 July. We welcome all questions and discussion related to TSP. If you are married, you would also need spousal consent waiver to do an in-service withdrawal. to be more specific it was a tsp 401k, negative cash flow is defined as a hardship. TSP sent me a letter explaining that when I separated with an active loan. I did a hardship withdrawal from my 401k for 25k earlier this year. It’s crucial to carefully weigh the potential consequences before making a decision. The monthly payment is becoming quite an issue to where we are pretty much living pay check to pay check. If you're asking about rolling it over to an IRA at a brokerage, you can go do it from the TSP website. My understanding is that house down payment is not considered a “hardship withdrawal” and 401k don’t allow for penalty-free withdrawal for down payments. You also may be eligible for a hardship withdrawal based on the cancer too. The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. My question is, after i get it and use the money, do I have to show the IRS My step kids were in their 20s when I married their mom. In order for earnings to be qualified, the account must have been opened for 5 years and the individual must be 59 1/2 years of age. My question is, if I were to go to the reserves. According to the TSP reps I've spoken to since then, it was mailed out on 8 July. But you don't actually have to roll it over if you don't want to, you can just leave it in the TSP, as it has some advantages If you miss a payment, they will report the remaining balance as an early disbursement and report it to the IRS. If you do that, you still have to withdraw proportionally from contributions and growth and will owe taxes and penalty on the taxable portion. I know that most suggest not doing it but I had to at this point as I couldn't do a loan right now. Employer 401k plans generally have higher fees than the TSP, so TSP is a good place to move money each time you change employers. DFAS has had me on hold for 8 hours today and when I finally talk to someone they tell me they do not have the rights or permissions to send my DD214 to TSP. It took 5 minutes. Not to get too into the weeds, but maybe stick to a loan of no more than $10k, so you aren't draining too much of your account/missing out on that compounding to such a great extent, pay off the highest interest debt, and work on researching a balance transfer for the rest (maybe one of your current cards already offers a "no interest until X date" on balance That’s different. S. They are giving me a hard time with the withdrawal and are saying they can only grant the withdrawal if i provide a foreclosure letter from the bank. The IRS is experiencing significant and extended delays in processing - everything. Get the Reddit app Scan this QR code to download the app now If you’re currently in the service, you can only withdraw money if you have a hardship (as defined by the IRS) or you are over 59. This bulletin supersedes TSP View community ranking In the Top 5% of largest communities on Reddit. Is it to transfer it to a personal IRA and pay the fees? Is it to purchase an annuity? From what I’ve researched so far if you stay in TSP then 55 years of age is when you can start withdrawing without a hardship. “The information that usually displays here is currently unavailable". I didn’t realize that a TSP loan was different than a Get an ad-free experience with special benefits, and directly support Reddit. Keep your most recent TSP statement with your 2024 tax documents to show how much you originally contributed. Looking for advice on how much tax I should have withheld from a hardship withdrawal from my TSP. The first check (large one) cashed with no issue. A hardship withdrawal should really be a desperate need and I would be hesitant if it was not a long term fix. I understand the implications, and the consequences. Financial hardship withdrawals are limited to four major financial hardships that are considered acceptable reasons: Negative monthly cash flow Always take the loan if possible. My husband is currently in the process of getting medically retired from the military. But to actually permanently remove money or transfer it to a 401k/IRA you need to leave federal service. You could do a Roth conversion (pay income tax on the converted amount) and then draw the converted amount (not growth) after 5 years penalty free. TSP automatically withholds 10%, should I increase to at least 24% or should I have more withheld from my paychecks? You can't withdraw your tsp without penalties until age of 59. Share Add a Comment. I recently separated and would like to rollover my TSP funds to get my tax-exempt money out of the traditional IRA into a Roth IRA. Get the Reddit app Scan this QR code to download the app now. When taking out a hardship withdrawal from my TSP, does that mean I can no longer contribute to it? Hello all, thanks in advance. The participant’s TSP account must have at least $1,000 of their own contributions and earnings on Has anyone done a financial hardship withdrawal? I was wondering the ramifications . We want to withdraw his TSP as we weren’t expecting him to be discharged (he was diagnosed with MS unexpectedly and recently). I think the consensus here is just paying off the debt without touching your TSP. I'm not experiencing a hardship, but I want to invest into something else (not rolling over into a different IRA). But even then, this is Reddit, not your command, so tell us what your situation is and folks may have even more suggestions. I'm AD mil. Or check it out in the app stores Has anyone actually received a hardship withdrawal from this company? After many reviews its really depressing. You’ll need to declare all this when it comes time to do your taxes. TSP Publication TSPBK26 “Tax Rules about TSP Payments” is specific about Roth TSP. She will need the money from my TSP to live on. If it is medical expenses, those are. Verbiage from the website: “You are only eligible to receive a financial hardship in-service withdrawal if you are experiencing negative monthly cash flow or have unpaid medical expenses, a casualty loss, or unpaid legal fees incurred for a separation or divorce, or losses due to a major natural disaster declared by the Federal Emergency Management Agency. The IRS is experiencing significant and Get the Reddit app Scan this QR code to download the app now. People are forgetting a crucial detail. Retirement Looking for some information on early weithdrawal from TSP. A reddit dedicated to the profession of Computer System Administration. Withdrawing TSP early upvote But Since I was a federal employee, she was still able to get half of it. Plus. I noticed a post from a year ago that discussed issues with withdrawing from your tsp account. Advantages of a Hardship Withdrawal. Question Does anyone know if you can unlock your TSP and do a non hardship withdrawal with on IRR after your active duty separation? My account is still locked and Thriftline is claiming I’m still employed. You have to call TSP, tell them you want to withdraw all your funds, they’ll ask you to confirm 50 times and they can then either direct deposit or or send you a check. The second check got declined. I thought TSP was basically like a savings account, I didn’t know i would be penalized this bad for taking out my own money that I saved. Has anyone done this? Can it be done? It looks like I can withdraw from “Roth Balance” but it would have to only be under hardship? If I withdraw all of my contributions in 2024 would this effectively make my net contributions to a Roth IRA $0? TIA!! Then you can at least withdraw the contributions tax/penalty free - as long as you leave your earnings sit you wouldn't pay any tax/penalties (you don't have the option to withdraw only contributions while it's in TSP, which is why transferring out first would be preferred if your contributions alone meet your need). Has anyone been audited or does anyone know the likelihood of being audited by the IRS as it relates to such a withdrawal? TSP allows self-certification so it appears documented support is only required if there's an IRS audit of a tax return. I am having the "confirm physical address" issue for my new account set up. I would leave that money alone in the TSP or you could roll it over into your 401K. Have anyone considered the in-service withdrawal while working as a federal employee and planning to retire. I am being told that tsp needs DFAS to send my DD214 but who do I call to get that ordered? I was told I could submit it myself but when I did I was told it is invalid and could have been faked I originally opted to have my hardship withdrawal sent via check, and it never arrived. The money in the TSP Hello, I have just "recently" retired as a Reservist on active-duty orders April 10th. I already owed the IRS 4k in income taxes from 2022, and my income has stayed the same so I’m sure I will have to pay 4k back in taxes from my 2023 income, on top of the TSP withdrawal. ThriftSavingsPlan join leave 61,710 readers. I don’t remember However, if you first rollover your Roth TSP balance to a Roth IRA, then you could withdraw only contributions without taxes or penalty (assuming the amount you withdraw is less than the amount you’ve contributed). Oh that might be what someone I knew did. Also, if you make a financial hardship withdrawal before age 59½, you may be subject to a10% early withdrawal penalty tax on the taxable portion of your withdrawal. Apparently, my reserve unit was transitioning to a new system as I was on my way out, so i am only able to do a hardship withdraw with TSP. Leave the money there, or roll it over to an IRA or your new employer's 401k. To qualify for a hardship withdrawal, your plan must allow them. He hasn’t been in the military long (this is his 3rd year in) so his contribution wasn’t a lot. It was a risky move since I had TSP disburse close to $150K directly to her. Like any important financial decision, you should take a few minutes to consider the pros and cons of making a TSP hardship withdrawal. Reply reply More replies. If you did traditional unfortunately the penalty will be on everything I’m pretty sure. Once this I called the TSP line to make a withdrawal, under hardship terms. Maybe this is on another thread, however, does anyone have definitive information if and how one can withdraw TSP money penalty free for being 10 I recently pulled a hardship withdrawal from my TSP for some astronomical medical bills. IF you felt inclined to do so, a TSP loan would make more sense. You can't do that. I separated in September ‘22 and DFAS has to send my DD214 to TSP because they won’t accept the one they told me to fax in. However, I would think very carefully about putting the TSP funds towards a beater car, as it will be a junker and rapidly deteriorate. The penalty is 10% on all earnings. It is a TSP in-service withdrawal without meeting the normal age requirements. You have no way to know what your future may hold. Hardship Withdrawal from 6/2022 Never Received . I’m in the 24% tax bracket and remain in the bracket even with the withdrawal. I see lots of posts from people Hardship requests cannot be taken for expenses already paid or those that are reimbursable. Please reconsider. If you want to do a withdrawal, a rollover, or a loan, I think you will need to put your receiving account information in your TSP profile 7 days ahead of time. Update on my situation - after more than 2 sorry months of daily active suffering through the process of trying to roll money from a different 401(k) into my TSP, including multiple TSP employees giving me incorrect information (mainly, that I didn’t need to mail in the paper checkapparently I did need to) and the local constituent . If you use your TSP money to pay off your cc debt, I would advise you to consider leaving at least $200 in your TSP account. Fidelity does not determine which withdrawals from a retirement account would be a hardship withdrawal; this is something that occurs between the client and the IRS. I never received the check. 5. To qualify for a financial hardship withdrawal, your financial need must be from one of the following four conditions: Recurring negative monthly cash flow; Medical expenses; Personal Trying to withdrawal from my TSP. However, when I spoke to someone at the ThriftLine service center they said I can only make in-service withdrawls if I'm 59 1/2 or in financial hardship. Eligibility. Will I still be able to withdraw from my TSP? Pic for I am 47 yo. For both options, you have to have at least $1000 of your own contributions in the account as that is the minimum withdraw amount, and you can only withdraw up to your own total contributions (including interest gained on your contributions). If you need money for moving, consider taking out a personal loan, it would be likely cheaper than the 10% penalty. You'll also be required to explain your immediate and heavy financial need, defined by the IRS. But if you absolutely must tap into it there are better ways than just liquidating it. It was established by Congress in the Federal Employees’ Retirement System Act of 1986 and offers the same types of savings and tax benefits that many private corporations offer their employees Our tax person suggested to withdraw my contributions to my Roth TSP so far this year. These you don't have to pay back but they charge 10% penalty, so you only get 90% of what you withdraw. It's my understanding I can withdraw my Roth TSP contributions (as opposed to earnings) at any time with no taxes or penalties. I know if you withdraw from your TSP you get a 10% penalty. The other option is to take a loan from your TSP. I’m a disability retiree who went back to work in the federal sector. Has anyone been audited or does anyone know the likelihood of being audited by the IRS as it relates to such a withdrawal? 401k hardship withdrawal - proof . in the uniformed service. More posts you may like On November 17, 2017, President Trump signed into law the TSP Modernization Act of 2017, which will provide TSP participants with more flexible withdrawal options. Edit 2/22/2023: Apparently this has been fixed. But general debt is not. If we were talking more debt then sure it would make some sense. TSP Hardship Withdrawals: Pros & Cons. For the first time in my life I am facing financial hardship. I was curious. While not the ideal situation, most likely taking out a hardship withdrawal. Only do the hardship of your loans are maxed out and your truly!! In a hole. I want to withdraw my funds from the TSP. ” Hardship withdrawals are limited by how much you qualify for based on documented need. I was enrolled in a tsp (thrift savings plan) while on active duty. Our pay changed from when we initially bought the car due to a duty station transfer from Hawaii. I know it seems entirely pointless right now but you need to start your retirement early if you wish to have any money at If you elect to withdraw TSP early, you can still do an in-service withdrawal online via TSP. If it's educational, those are too. My question is, should I make a withdrawal from my TSP account to pay down the car to it's current value? Once that is done I can try and Assuming you contributed to the Roth tsp and the money was in there for at least 5 years you should not have the penalty on the contributions just the gains. TSP Early Withdrawal Penalty Question . The purpose of this bulletin is to notify agencies/services that the Federal Retirement Thrift Investment Board (FRTIB) has implemented new withdrawal rules and processes for financial hardship in-service withdrawals as a result of the TSP Modernization Act of 2017. With a hardship withdrawal, you will need to provide receipts and your requested withdrawal amount must be equal to or less than your total documented expense. And the website indicates only the following are hardships: 1) Recurring negative monthly cash flow; 2) Medical expenses (including household improvements needed for medical care) that you have not yet paid and that are not covered by insurance; 3) Personal casualty loss(es) that you have If you're still in service (Active or Reserve): the only way for you to withdraw from the TSP is if you qualify for a hardship withdrawal. Posted by u/jcfurr331 - 1 vote and no comments After some rough times recently I've been forced to apply for a 401 hardship withdrawal through my employer's plan which goes through Principal. 5). Ugh, I feel all of that. I was able to successfully submit a fixed monthly withdrawal of $2500/month this morning. Question I read you can withdrawal from your TSP if you are experiencing financial hardship from negative cash flow? I am $4000 in debt from personal credit cards. Or check it out in the app stores i was wondering if i am able to withdrawal my tsp prior to 59 and without a hardship, while still active. There are lots of better options. 1. My ex paid the tax and I saved myself $17,000. TSP Hardship withdrawal/new account access issues . Being in debt isn't an acceptable hardship reason. Hardship withdrawal Unsolved I’m considering taking a hardship withdrawal from my 401k to pay some medical bills. It depends on exactly how much detail the plan admin requires to sign off on the request. Which is what I’m trying to avoid with the withdrawal obviously. Reddit's home for tax geeks and taxpayers! News, discussion, policy, and law relating to any tax - U. You pay the interest back to yourself but you miss out on any gains you may have otherwise seen. Get the Reddit app Scan this QR code to download the app now Withdrawing TSP on IRR . I was sent two checks. If you withdraw from the TSP early you have to pay a heavy tax for early withdrawal, and Get the Reddit app Scan this QR code to download the app now. Adding to this, you can only do an in-service withdrawal for hardship or if you’re over 59. 25 users here now. If you have a Roth TSP balance same but not taxes on the conversion. It's really best to leave it there as the TSP is one of the best retirement accounts available, and you can continue to contribute to it by moving your own IRA or 401k (after you change jobs) into the TSP. Hey everyone, new guy here. As an official Fidelity customer care channel, our community is the best way to get help on Reddit with your questions about investing with Fidelity – directly from Does anyone have any experience with taking a hardship withdrawal from TSP? I'm fairly certain my situation meets the criteria for "recurring negative cash flow", but I'd rather not have to jump through the hoops to prove it. The advantage of making a hardship withdrawal is clear and simple: you can access your money in a qualifying emergency. I went under the category of separation/ divorce expenses. Plus when I die my pension that my wife will get from me drops to 55%. Hardship withdrawal of 401k (age 28) A TSP-76 allows civilian and uniformed services participants to request a TSP withdrawal for financial hardship while they are still in service. I have been in continuous contact with TSP regarding getting it re-issued via direct deposit for about the past month and have been told multiple different things and timelines. What are some other reasons or strategies for doing an in-service withdrawal. I am currently 26, and seperated and no longer federally employed. ” Keep it in TSP or rollover to an IRA. I went to Wal-Mart to cash the checks so I could deposit money into my account. Or check it out in the app stores Hardship withdraws . I know that I will be required to pay the IRS 10% penalty for early withdrawal in addition to the normal taxes being taken out, but when do I pay that penalty? Reddit's home for tax geeks and taxpayers! News, discussion, policy View community ranking In the Top 5% of largest communities on Reddit. If your money is in Roth, then your total contribution amount is tax/penalty free, and any amount in excess of that contribution amount is penalized at 10% and taxed as regular This is an UNOFFICIAL subreddit that is intended to provide info and advice to Federal Civilian and military employees who contribute to the TSP as part of their retirement plan. I’m not turning down free money. While I’m not facing foreclosure I need funds to cover mortgage. The one thing I will implore you to not do is go to one of the predatory lenders that are outside the gate. A financial hardship withdrawal may allow for early distribution from your TSP account under specific circumstances. TSP is so important for your retirement especially if you don’t have an alternative already set up. Before performing this kind of financial hardship in-service withdrawal, you must have a qualifying financial need. Or check it out in the app stores Financial Hardship TSP . That can’t be the 10% early withdrawal penalty, because 10% of $65k is $6,500. I have called the TSP service line a half dozen times since then, and they have Get an ad-free experience with special benefits, and directly support Reddit. My 401k allows hardships for negative monthly cash flow. cjnhvuw qecwi ptgbvs csim thxj myqn okmbag uhac bqvqkl lwwxax