Q. I am retiring from the Army after 22 years of service and I am 45 yrs. old. Can I start withdrawing from the Thrift Savings Plan and avoid the early withdrawal penalty by taking a series of Substantially Equal Periodic Payments? How does that work? My life expectancy is 37.7 more years, according to the Internal Revenue Service, so is that the number of years my funds can be distributed? If so, do I then divide what I saved by 37.7 and again divide by 12 to see what my monthly payments would be?

A. You may avoid the penalty by taking a series of Substantially Equal Periodic Payments, but the rules are complicated and strict, with the penalty for violating them potentially large. I suggest that you consult with a CPA or other qualified tax preparer, who will prepare and stand behind your returns during the distributions, to run the calculations for you. There are actually three options for calculating the distribution amounts, and they typically produce a wide range of values. If you insist on doing it yourself, you can start the learning process by conducting an Internet search on “72t distributions,” but the IRS won’t care if you relied on bad information or methods that led to mistakes.


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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 and view his blog at

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