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I was recently writing about Eligible Life Events (ELQs) as they apply to most federal benefits and could not find a list of life events that apply to TSP posted on the TSP website. Eligible life events are situations that allow you to change your registration for a specified period outside of an open season. Although there is more than the list below for some federal benefits, these five items are considered QLEs for all federal benefits. Assurance and allow a participant to change their registration outside of an open season if done up to 30 days before or within 60 days of the event.
• Wedding ;
• Divorce;
• Death of a spouse;
• Birth of an eligible child;
• Adoption of an eligible child.
The Thrift Savings Plan is not a type of insurance that has recurring (eg, FEHB) or infrequent and sporadic (eg, FEGLI) opening periods that allow for changes to one’s health plan or status. membership. It is rather the federal pension systems (FERS and CSRS) where once registered, you have nothing more to do.
However, since we have the ability to change both our contribution allocations, including the amount we contribute (as often as we want) and our account balances (up to twice a month, except exceptions), we have even more possibilities to adjust our TSP than we do our insurance benefits. We just need to be aware of our situation, take the time and make the effort to keep abreast of our TSP.
The Thrift Savings Plan has ages (as opposed to events) that are important. Upon reaching these ages, we are allowed to do certain things (eg take distributions without penalty) or are required to do certain things (eg take minimum distributions). Here are those ages and what you can (or should) do when you reach them. I have also included the ages that apply to other major retirement benefits.
55 years (50 years for special category employees) – If you separate in (or after) the year in which you reach these ages, you can withdraw from your savings plan without facing the early withdrawal penalty by 10%.
Age 59 ½ – At this age, your withdrawals from your Roth TSP will become eligible (as long as you have had the Roth balance in your account for five years or more) and the income will not be taxed. Any withdrawal from your Roth TSP balance before 59½ will result in the income portion of your withdrawal being taxed for federal income tax purposes. Also, at this age, you will be able to make withdrawals without penalty from any individual retirement plan (IRA) you have.
62 years old – The retirement pension supplement ends for FERS employees (CSRS employees are not entitled to it in the first place). In addition, you will be able to apply for Social Security retirement benefits, even if you do not have to.
65 – You will become eligible for Medicare. It makes sense to apply for Part A. If you have worked past age 65 at your federal job, or any other job that offers you health insurance, you may delay your decision whether or not to apply for Part B until after your retirement. If you are retired at 65, you must make the decision whether or not to apply for Part B. If you are a retired military member covered by TRICARE, you will need to choose Medicare Part B at 65, whether you work or not.
Social Security full retirement age – this will be 66 or 67 for most of us. You are no longer subject to the Social Security income test.
Age 70 – If you haven’t applied for Social Security yet, you should do so now, as your benefit will not continue to receive deferred retirement credits after that age.
72 years old – At this age, you should start receiving the minimum required distributions from most of your retirement accounts. This does not include Roth IRAs, but does include your TSP, unless you are still working at your federal position.
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