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Updated over 6 years ago,

User Stats

24
Posts
8
Votes
Gregory A.
  • Richmond, VA
8
Votes |
24
Posts

Taxes on early withdrawal from a ROTH TSP

Gregory A.
  • Richmond, VA
Posted

Hello Bigger Pockets! I am seeking some advice on withdrawing from my Roth TSP. I finished my active duty last August and have not done anything with my TSP since then. It has continued to grow, but I am interested in pulling all of the funds out to use for investing in deals for myself. I know there are some incentives to using a self-directed IRA, but I am not interested. I am more interested in liquidating this asset.

What I know currently is since it is all roth contributions and earnings and the account is over 5 years old that it should not accrue the early withdrawal penalty of 10% from their website and video posted on their website. It would also appear, that I would not be paying any income tax on the roth contributions since I already paid those taxes, but I would be liable for taxes on any roth earnings that I would take out at my federal/state income tax rates since I am withdrawing early ( I am 32 years old). 

Does any have any experience on dealing with TSPs and what kind of tax implications I am subject to?  I believe I read through all of the material available on their website but I'd rather consult an actual tax pro that may have experience.  

Thank you for your time guys.

Greg

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