TSP withdrawal penalty


Q: I am retiring Dec. 31, 2010. I will be 55 years and 11 months old with 35 years of service. I would like to leave my Thrift Savings Plan monies, but make one withdrawal only and leave the rest until I either have to take withdrawals or need additional income to supplement my pension. Can I make the one withdrawal without paying the 10 percent penalty?
A: Under the circumstances you describe, you will be allowed one partial withdrawal after you retire, without penalty. You may then take a full withdrawal — either in monthly payments or a lump sum — later.


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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.

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