Q. I was born Jan. 21, 1980, so I’m currently 37. I turn 57 (my minimum retirement age) in 2037. I have 10 years of AD service, from June 1998-May 2008. I joined the civil service a week after leaving the military and now have roughly nine years of service. I have bought back all 10 years of military service but am still in the Air Guard. The Guard position is not linked to my FERS position. If I retire at age 57, do I suffer any penalties or taxes for pulling before age 59½? Or do I need to follow the IRS minimum distribution calculations to avoid the 10 percent penalty for early withdrawal? And if I took it, am I able to withdraw my TSP without the 10 percent penalty?
A. If you separate from federal service during, or after, the calendar year in which you reach age 55, your post-separation TSP withdrawals will be exempted from the IRS early withdrawal penalty. If you separate earlier than this, your withdrawals will be subject to the penalty until you reach age 59½, unless you qualify for one of the other exemptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
