Penalty tax


Q: I’m 57 and just retired from CSRS a month ago with 30 years of service. I want to do a full withdrawal to pay off my mortgage but I’m trying to determine if I will have to pay the 10 percent penalty tax. According to page 4 of the TSP-536 (1/10) flyer, “the additional 10 percent tax generally does not apply to payments that are: Paid after you separate from service during or after the year you reach 55.” The word “generally” concerns me. I read the TSP Withdrawing Your TSP Account After Leaving Federal Service, dated June 2007 pamphlet but couldn’t find reference that I wouldn’t be penalized so I’m concerned. Am I correct that I won’t have to pay the additional 10 percent since I’m over 55?

A: You’re correct — no penalty.



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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 and view his blog at

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