What restrictions apply to withdrawals?
The money in your TSA is intended for your retirement. Accordingly, withdrawals may be subject to charges, and withdrawals before age 59½ are restricted by tax law. When permitted, however, withdrawals are fully taxable, and, if made before age 59½, may be subject to a 10% tax penalty. Until you reach age 59½, you can only withdraw your pre-tax contributions and related earnings if you sever employment with your employer, become disabled, incur a hardship (as defined by the IRS), or die, or are a reservist called to active duty before 2008 for 180 days or more or an indefinite period. Earnings cannot be distributed on account of a hardship. After age 59½, there are no tax-law restrictions on withdrawals, although your employer may impose restrictions if your TSA is part of an employer-sponsored retirement plan.
