Dan and Katelyn discuss how recent tax law changes affect federal retirement planning and what federal employees should understand before taking a hardship withdrawal from their TSP.
Check Out Our Next FERS Webinar for Federal Employees -
The Fed15 Podcast | Ep. 145: Tax Changes for Federal Retirees + TSP Hardship Withdrawals Explained
Katelyn explains how the One Big Beautiful Bill Act (OBBBA) extended several provisions from the Tax Cuts and Jobs Act (TCJA), removing the expected tax bracket increases many retirees were planning for in 2026. She discusses what this means for federal retiree tax planning, including decisions around Roth vs. Traditional contributions, the timing of Roth conversions, and how to coordinate withdrawals with pensions, Social Security, and required minimum distributions.
Dan follows by explaining how TSP hardship withdrawals work and the long-term impact they can have on retirement savings. He reviews the eligibility requirements, tax implications, and potential penalties that may apply. He also discusses practical steps federal employees can take to rebuild their TSP after a withdrawal, including increasing contributions, rebuilding an emergency fund, and reviewing investment allocations to get their retirement plan back on track.
Like and Subscribe on YouTube at YouTube.com/FedLife
“Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Lee, Sipe & Associates, Inc. is not a registered broker/dealer and is independent of Raymond James. Content represents the opinions of the speaker and not necessarily those of Raymond James. Important Disclosure Information: http://raymondjames.com/smicd.htm.
