Q: I am a 52-year-old law enforcement officer, 6(c) designation, and retired under the Federal Employees Retirement System this past year. Although I thought I had a good handle on this from your website, I am confused by a retirement guide an LEO put out indicating the following: “If you continue your agency employment at least one day into the calendar year of your 55th birthday, you may make unabated penalty-free withdrawals from your TSP account upon retirement. You cannot roll over your TSP and make penalty-free withdrawals at 55.”
The first part indicates than an LEO must work until the year he turns 55 to receive unabated penalty-free access to his Thrift Savings Plan account. So my first question is, can someone in my position who retired with 6(c) coverage at age 52 be eligible to make unabated penalty-free withdrawals from my TSP account when I turn 55? The second question is, can someone in my situation roll over a TSP account into an individual retirement account, whether it is at 52 or 57 years of age?
A: The rule is simple: If you separate from TSP-covered service during or after the calendar year in which you reach age 55, you may take penalty-free withdrawals from your TSP account. This is not true of an IRA, so if you roll over your TSP balance into an IRA after you leave federal service, you will have to wait until age 59 1/2 (unless you qualify for some other exception, such as disability or by employing a series of Substantially Equal Periodic Payments under IRS rules) for the same penalty-free access to your funds.
You are free to roll over your TSP balance to an IRA account any time after you leave federal service.
