This reduces the benefits that you, or your beneficiary, must include in income.

You choose to receive your account balance in monthly payments based on your life expectancy. It remains the same, even if your annuity is increased. All of the money in your Thrift Savings Plan TSP account is taxed as ordinary income when you receive it. Generally, this rule applies as long as you receive your annuity. To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Tell your supervisor about your proposed retirement date.

The nontaxability of any part of the distribution that you roll over within 60 days after you receive the distribution. The participant is still alive, so the mortality decrement would have to be factored back into the value. Treat a payment for accrued annual leave received on retirement as a salary payment.

However, this additional tax does not apply in any of the following situations.