Which TSP Balance Your Withdrawal Comes Out Of

If you contributed to both the traditional and the Roth TSP, you do not have one account with two labels. You have two balances taxed under different rules, and 5 CFR 1650.2(h) gives you exactly three ways to draw from them: traditional only, Roth only, or pro rata from both.

That single election decides four separate things. Three of the four land differently on each side of the account. The fourth is identical on both, which is the one most people assume is the difference.

The election, and what it does not let you choose

You choose the balance. You do not choose anything inside it. The same subsection states that a distribution from the Roth balance is prorated between contributions and earnings, and that every withdrawal comes pro rata from all TSP core funds regardless of election. There is no "take my contributions first" option, because the regulation does not contain one — and neither does the statute behind it.

This is the point people carry over wrongly from a Roth IRA, where 26 U.S.C. § 408A(d)(4) really does order contributions first. Inside a plan, § 402A(d)(4) routes the split through § 72(e)(8) instead, and every non-qualified dollar out is part contribution, part earnings.

Rule 1 — how much of it is taxable

Take someone aged 58 who separated in the year they turned 56, holding a Roth balance of $200,000 of which $150,000 is contributions, and a traditional balance alongside it. They withdraw $30,000. The same amount, in the same year, from the same person — only the election changes:

• Roth only. The account is 75% contributions, so the withdrawal is $22,500 of contributions and $7,500 of earnings. Taxable: $7,500. Tax at 22%: $1,650.
• Traditional only. A traditional balance holds no basis, so the whole withdrawal is income. Taxable: $30,000. Tax at 22%: $6,600.

The identical $30,000 costs $4,950 more in tax from one balance than the other. Nothing about the withdrawal changed except which box it came out of.

Rule 2 — the five-year clock, which exists on one side only

A traditional balance has no waiting period. A Roth balance has two conditions under § 402A(d)(2), and needs both: age 59½ (or death, or disability) and a five-taxable-year period of participation. The clock starts on 1 January of the first year a Roth contribution was made — not the contribution date — so a contribution in December buys that whole year.

For the person above, whose first Roth contribution year was 2024, the two conditions do not arrive together. They turn 59½ in September 2027, but the account is not qualified until January 2029. Turning 59½ does nothing for them. The clock is the binding constraint, and it runs more than a year longer than the age everyone watches.

Rule 3 — which balance the law eventually forces out

Required minimum distributions reach the traditional balance and not the Roth one. § 402A(d)(5), added by § 325 of the SECURE 2.0 Act for taxable years beginning after 31 December 2023, disapplies § 401(a)(9)(A) to a designated Roth account before death. From 2024 the Roth balance is left out of the RMD calculation entirely.

For a participant born in 1968, the applicable age on the traditional side is 75. On the Roth side there is no age at all. Two balances in one account, and only one of them has a deadline.

Rule 4 — what is withheld before you see it

The mandatory 20% under § 3405(c) applies to both balances, because both are eligible rollover distributions — but it is withheld on the taxable part, not the gross. On the same $30,000, the Roth election has $1,500 withheld and the traditional election has $6,000, a difference of $4,500 in what actually reaches the bank that month. Withholding is not tax — it is settled at filing either way — but it decides what you can spend now.

The rule that is the same on both sides

The 10% additional tax under § 72(t) is identical statute on both balances. The person above pays none of it on either election, for the same reason: they separated during or after the calendar year they turned 55, so § 72(t)(2)(A)(v) exempts their plan distributions from that point on, at any age.

This surprises people in both directions. It is not a Roth advantage, and choosing the Roth balance to dodge a penalty does nothing — the penalty was decided by the year you separated, not by which balance you draw from or how old you are now. The mechanics are worked through in which age rule governs your TSP withdrawal.

The election does not end when the money does

This is the part that catches people, and it is a single sentence of regulation. 5 CFR 1650.13(c): if you elect installment payments from the traditional balance only, or the Roth balance only, the payments automatically continue from the non-elected balance once the elected one is expended, unless you change or stop them under § 1650.17(c).

So a retiree who set up Roth-only installments — every rule above working in their favour — keeps receiving the same monthly amount after the Roth balance runs dry, and it is now coming from the traditional balance. Fully taxable rather than partly. Withheld on the gross rather than the taxable part. Nothing announces the switch, because from the plan's side nothing went wrong: the election was honoured until it could not be, and then it kept paying.

What this guide does not cover

It does not tell you which balance to draw from. That depends on your tax rate now against your tax rate later, which is a forecast rather than a rule, and this site computes rather than advises. It does not cover Roth in-plan conversions, which TSP began accepting on 28 January 2026 and which carry their own separate five-year recapture period. It does not cover rollovers out of the plan, where a different trap applies — a Roth TSP rolled into a newly opened Roth IRA restarts the five-year clock rather than inheriting it. And the tax figures here use a single assumed marginal rate of 22%, which is an input rather than a published constant.

The Roth TSP withdrawal calculator works the Roth side of all of this from your own balances and dates — the pro-rata split, the date your account turns qualified, and what a rollover would do to that date.

This guide is informational only. It is not financial, tax, or legal advice, and FedAnnuity is not affiliated with OPM or the U.S. government. Retirement rules turn on the specific facts of a career, and only your agency and OPM can give you a binding figure.

Last reviewed: August 2026 · Against 5 CFR 1650.2(h) and 1650.13(c); 26 U.S.C. § 402A.