TSP penalty woes


Q. I turned 59 1/2 last November and noticed the 10 percent penalty is still being taken from my monthly TSP payment. Is this correct?

A. I’m not sure, but I don’t think that the deduction you are seeing is for the penalty. I believe that it’s just tax withholding. The penalty is usually assessed, or not, when you file your tax return. In any case, if you over-pay during the year, you will receive a refund after you file your tax return for the year.


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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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