Q: I am a CSRS employee and plan to retire Dec 31. I will meet the minimum age and years-of-service requirement for retirement. If I close my TSP account and withdraw all my funds prior to my retirement date, will I incur the 10 percent early withdrawal penalty?
A: You’ll have to wait until you retire to close your account. If you withdraw your funds while still in service after you have reached age 59½, you will not be penalized for an early withdrawal. If you wait until you retire during the year in which you reach age 55, you also will avoid the early withdrawal penalty.
