Q. I am an FAA air traffic controller with 27 years of service. I was wondering about the age 55 rule for a one-time withdrawal of TSP funds without penalty. If I retire at age 53, can I take out a lump sum when I turn 55, or do I have to work and retire the year I turn 55 to do this? If so, how much money can be taken out without penalty. I also was wondering if I worked till mandatory retirement age, and get forced out, can I still get the one time lump-sum withdrawal without penalty when I am 56 or anytime after this?
A. Unless you retire (or otherwise separate from federal service) during, or after, the calendar year in which you reach age 55, your TSP withdrawals will be subject to the early withdrawal penalty unless you can meet one of the exceptions listed on Page 4 of this notice: https://www.tsp.gov/PDF/formspubs/octax92-32.pdf.
