Only a few weeks until the newest and less restrictive changes to the TSP are about to take place after years of discussion and planning. September 15th marks the official day that the new changes go through.
Because of the withdrawal options previously offered by the TSP compared to other comparable IRA plans in the private sector, these new changes play as a course correction and response to the swaths of enrollees who would close their accounts at retirement and move the funds to more open IRAs or other investment and savings accounts. The idea is that people keep their money invested in the TSP throughout their retirement, and these new steps are engineered to help address part of the issues people have had, and help aide to that end.
As such, the TSP has made some recent announcements, alerting participants to the changes and goading them into reviewing their current policies to ensure all the information therein is correct. One of the other new changes involves online access to your account too, so this is also an excellent time to update your login information and learn how this new online portal works.
At the behest of the TSP, they’re urging enrollees to put off withdrawals if possible until after the September 15th start date, when the new features will be available, in order to maximize their options and not get caught behind with old policy. To that end, the week of September 7th will see a halt to withdrawal requests to allow the TSP time to wrap up all the loose ends with the old policy and ease into a smooth launch of the new policy.
If you have made a withdrawal under the old policy, the new changes will also apply to you, so you will not miss out on any of the benefits of it. Also, there will be other changes made to the hardship based withdrawals you may have made which will make the penalties for doing such a transaction less severe, and resetting the clock for anyone who was in a waiting period after making such a withdrawal from before.