Early withdrawal penalty?


Q. I am retiring in six months with 30 years under FERS at age 57 (my minimum retirement age). I am planning on using my Thrift Savings Plan to buy a house with equal payments for five years. The payments will start one or two months after retirement. Will I be penalized for early withdrawal because I am not 59½ ? I was under the impression that TSP was considered one-third of my retirement, and that at time of retirement, I would be eligible to withdraw. Is this correct?

A. Since you are retiring during or after the calendar year in which you reach age 55, you will not be penalized for withdrawing from your TSP account before age 59½.


About Author

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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