TSP withdrawal penalty


Q. Is there a penalty for taking a lump sum TSP balance out at retirement for FERS employee to purchase a home? I may retire at age 56 or 57 with 30 years of federal service. If I decide to take my lump sum at retirement, will I be penalized? How much would come out if the amount is $170,000 right now?

A. If you retire during or after the year in which you reach age 55, there will be no early withdrawal penalty assessed on your subsequent TSP withdrawals.


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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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