Deferred retirement and TSP annuity

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Q. I am considering leaving the federal government next year when I turn 50. At that time, I will have 27 years of service and will be deferring retirement until I am 62. Is it possible to start collecting an annuity with my TSP balance at that time and will there be a 10 percent penalty for early withdrawal?

A. A life annuity purchased with your TSP assets is always exempt from the early withdrawal penalty.

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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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