Early TSP withdrawal


Q: If I retire from the Postal Service this next year, can I draw monthly payments from my TSP account before I am 59 1/2 without penalty?

A: Yes, if you: 1. Retired during or after the year in which you reached age 55; or 2. Take them as series of Substantially Equal Periodic Payments under IRS rules; or 3. Meet one of the other exceptions to the penalty outlined in the notice you’ll find at www.tsp.gov/forms/octax92-32.pdf

— Mike Miles


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.


  1. I will be 59 1/2 end of March 2010. I want to make a one time partial withdraw from my TSP account. I assume since I am 59 1/2, and will still be working, there will be no penalties. Is that correct?

  2. I’m retiring after 20 years of service, if I cash in my TSP of 20,000…..how much of a penalty can I expect to pay?

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