President Trump has signed into law the TSP Modernization Act of 2017, the Bill will allow multiple age-based in-service withdrawals and multiple post-separation withdrawals in the TSP and to create more flexibility in the option to choose “substantially equal” withdrawals--by allowing annual or quarterly withdrawals in addition to monthly, changes in amounts at any time rather than just once a year, and the purchase of an annuity after receiving such payments, in addition to taking a
lump-sum payment.

The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. It also removes the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. Though it has no effect on required minimum distributions mandated by the Internal Revenue Code, the law also allows separated participants who are over age 70½ to remain in the TSP, eliminating the requirement to make a withdrawal election on an entire account balance. Participants will also be able to stop monthly payments, change payment frequency, or elect to purchase an annuity while receiving monthly payments.