Question: What is going on with the new TSP withdrawal rules?

Answer: The 401(k)-style Thrift Savings Plan announced last week that expanded withdrawal options enacted into law last year will be available in September 2019.

Those changes were a response to investors transferring their money to IRAs after leaving the government rather than leaving the money in the TSP, because of its limited withdrawal choices. That meant the TSP has to revise rules, update computer systems, rewrite forms and more.

Among other changes, investors who have retired or otherwise left the government will be allowed to take withdrawals quarterly or annually in addition to monthly; change, stop or restart them at any time, within certain limits; and choose whether to take money from traditional or from “Roth” balances, for those with both. Also, those still working past age 59½ will be able to take up to four withdrawals without a tax penalty annually — currently, only one such withdrawal is allowed lifetime.

“We had looked into phasing them, and it turned out that it was not the timesaver we had hoped,” TSP spokesman Kim Weaver said. “We are very aware that our participants want this flexibility as soon as possible.”