Changes

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, effective September 15, 2019.</ref>

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, effective September 15, 2019.</ref>

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones), and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones)<ref>Effective September 15, 2019, the waiting period will no longer be in effect, and all persons who were subject to a waiting period will have it cease automatically.</ref>, and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance:

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance: