In this video, you’ll learn about the different Thrift Savings Plan withdrawal options and the tax implications of those options. ⏰ Timecodes 0:00 – Intro 0:42 – Distribution Sources 1:37 – Installment Payments 3:16 – Single Distribution 3:55 – Life Annuity 5:00 – TSP Tax Reporting 6:03 – TSP Withdrawal Taxes 9:01 – TSP State Tax Planning QUESTION — Have a question about Personal Finance, Federal Benefits, or Retirement Planning? Post in the comments section or contact us at: Are you seeking a financial planner who specializes in working with federal employees? Schedule a free consultation at: Connect with Fedway Financial on Social Media: Connect with Jerel Harvey on Social Media: #fedwayfinancial #themoneybriefing 🎵 Music provided by LAKEY INSPIRED – Chill Day Disclaimer: All content on this site is for general information purposes only and is not intended to provide any personalized financial advice....(read more)
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The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and members of the military. One of the most important aspects of the TSP is how the withdrawals are taxed when you decide to start taking distributions. There are several different TSP withdrawal options and understanding how they are taxed can help you make informed decisions about your retirement income. The TSP offers several different withdrawal options depending on your needs and preferences. You can choose to take a single payment or set up regular payments over time. You can also choose to continue investing your TSP funds even after you start taking withdrawals. If you take a single payment from your TSP, it will be subject to federal income tax. The amount of tax you pay depends on your income level and other factors, such as deductions and exemptions. The TSP will also withhold 20% of the distribution for federal income taxes, which can be a significant amount for larger withdrawals. If you choose to take regular payments from your TSP, they can be either a fixed amount or calculated based on your life expectancy. The fixed payments will be subject to federal income tax just like a single payment, but the amount of tax you pay may vary depending on how much you withdraw each year. If you choose to take payments based on your life expectancy, the payments will be spread out over a longer period of time, which can help reduce the amount of taxes you pay each year. These payments are calculated based on your age, so the older you are, the higher your payments will be. Another option for TSP withdrawals is to purchase an annuity. An annuity is an insurance product that provides regular payments for a set period of time or for the rest of your life. Annuities can be a good option for people who want a guaranteed source of income in retirement, but they are often subject to high fees and may not offer the same level of flexibility as other TSP withdrawal options. When you start taking TSP withdrawals, it’s important to keep track of how much you withdraw each year and how much tax you pay on those withdrawals. You may be subject to penalties if you withdraw too much too soon or if you don’t take your minimum required distributions each year. In conclusion, the TSP offers several different withdrawal options for federal employees and members of the military, but each option is subject to federal income tax. Understanding these taxes and how they affect your retirement income can help you make informed decisions about your TSP withdrawals and ensure that you have enough money to live comfortably in retirement. https://inflationprotection.org/the-tsp-withdrawal-options-and-how-they-are-taxed/?feed_id=79549&_unique_id=64172865815c6 #Inflation #Retirement #GoldIRA #Wealth #Investing #federalbenefits #federalemployees #federalretirement #FedwayFinancial #FERS #fersretirement #JerelHarvey #newtspwithdrawalrules2022 #TheMoneyBriefing #thriftsavingsplan #thriftsavingsplanwithdrawal #tsp #tspwithdrawal #TSPWithdrawalAge #TSPWithdrawalForm #tspwithdrawaloptions #TSPWithdrawalRulesAfterRetirement #TSPWithdrawalTaxes #ThriftSavingsPlan #federalbenefits #federalemployees #federalretirement #FedwayFinancial #FERS #fersretirement #JerelHarvey #newtspwithdrawalrules2022 #TheMoneyBriefing #thriftsavingsplan #thriftsavingsplanwithdrawal #tsp #tspwithdrawal #TSPWithdrawalAge #TSPWithdrawalForm #tspwithdrawaloptions #TSPWithdrawalRulesAfterRetirement #TSPWithdrawalTaxes
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