Q. I just completed six years of service in the Army. I have been making contributions since I enlisted thanks to my supervisor at the time. I would like to know: what the penalty is for an early withdrawal. Also, will I be penalized for transferring it over to another retirement plan?
A. The early withdrawal penalty is 10 percent of gains withdrawn, when it applies. You may roll your Thrift Savings Plan balance into an IRA or other qualified retirement plan to avoid the penalty and current taxation. Of course, you may leave your money in the TSP and manage there for as long as you like, which is a good idea if you don’t need the money.