TSP withdrawals under VERA


Q. I am 53 years old and reached 30 years of government service earlier this month. I work for the Environmental Protection Agency and am preparing for the possibility of being offered VERA/VSIP.

I am trying to determine if it is possible to make a partial withdrawal from my TSP under VERA. My thinking is that a partial withdrawal would enable me to, at a minimum, have funding to bridge me to the start of receiving the FERS supplement at my minimum retirement age of 56. The only thing that I’ve been able to find is that I have the option of purchasing a TSP annuity or by starting monthly payments based on life expectancy. Is that correct?

A. There are three ways to obtain a partial lump-sum withdrawal after you separate from service:

1. Fail to repay an outstanding TSP loan.
2. Request a once-in-a-lifetime partial lump-sum withdrawal using form TSP-77.
3. Request a lump-sum withdrawal as part of a mixed full withdrawal using form TSP-79.

If done in that order, you may do all three. Keep in mind that retirement under a VERA does not create an exception to the IRS withdrawal penalty to distributions received before you reach 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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