Q. I am eligible to retire under FERS in January 2016 — at age 56 with 36 years of continuous federal service — and begin drawing a pension. As such, I am able to withdraw from my TSP without incurring the early withdrawal penalty. I am also eligible for the Social Security supplement. If I retire from federal service, begin drawing my pension, and take a job with a private company or start my own business, I understand that I will lose the Social Security supplement if my gross income exceeds a certain threshold, but will I still be able to withdraw from my TSP without incurring the early withdrawal penalty? Also, if I am withdrawing from my TSP, am I eligible to contribute to an employer’s qualified retirement plan?
A: Under the circumstances you describe:
1. You will be able to continue drawing from your TSP account without penalty.
2. You will not be prohibited from contributing to an employer-sponsored plan because you are drawing from your TSP account.
