Exemption from withdrawal penalty?


Q: I am 51 and will retire from federal law enforcement after 24 years of service. Will I have to pay the 10 percent penalty for early withdrawal?  I was always told the federal hazardous duty act exempted me from the provision.

A: It is my understanding that the exemption applies only to withdrawals from a defined benefit pension plan, and not to withdrawals from defined contribution plans like the TSP. Check with a CPA to be sure before you proceed.


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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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