Q: I am a CSRS employee with 34 years of service. Should I take a VERA at the age of 53? What penalties will be imposed on my TSP? I would like to draw it out in one lump sum and invest it in an annuity recommended by my financial adviser.
A: You will be subject to the early withdrawal penalty unless you roll over the withdrawal into an IRA. You may want to think carefully before following your “adviser’s” recommendation. I suspect that he/she is actually a salesperson who is compromising your interests in favor of their own! I know of no good reason, other than a nice sales commission for the agent, that you would make such a move. Leave as much of your money as you can in the TSP for as long as possible. In fact, if you have an IRA, you should move it into the TSP, rather than the other way around.
