14,000 Make Thrift Savings Plan Hardship Withdrawals

The Washington Post recently reported that about 14,000 federal employees made hardship withdrawals from their Thrift Savings Plan (TSP) in the month of October, 2013, the month the government shut down. This marked the highest amount of withdrawals since the program began; the average withdrawal amount was over $9,000.

Once you make hardship withdrawal, you cannot contribute to your TSP fund for six months. You won’t receive your Agency Matching Contributions during that time or after the six months unless you fill out special forms. You may also have to pay state income taxes and if you’re under 59 ½, you’ll have to pay a 10% early withdrawal tax as well.

Making a withdrawal from your Thrift Savings Plan can be a hassle, and can cost you a lot in taxes and other penalties. Index universal life insurance (IUL) is a retirement plan that can save you time, money, and stress. With IULs, you can withdraw from your account anytime you’d like without paying income taxes or heavy fees. IULs don’t have any age restrictions, and you can earn interest on your money with no market risk. You can have the comfort of knowing that you’ll have retirement funds when you’re older and have access to your money when times are tough.

If you’re tired of age restrictions and taxes on your retirement funds, visit our IUL Retirement page to compare our retirement options with the government’s Thrift Savings Plan. You can also give us a call at 888-340-7187 or fill out the form to the right for more information. We’ll be happy to help you find a retirement plan that meets your needs and expectations.

Check out some of our other blogs

• FEGLI Option C is Not Best Option for Children's Coverage

• You Could Access Your Retirement Savings Sooner Than You Thought

• Annuities and Retirement for Federal and Government Employees