Monthly 401(k) withdrawals at retirement

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Q. I am a FERS employee with 33 years of service and will be eligible to retire at the end of the year when I turn 56. Upon retirement, I would like to keep my 401(k) money in my TSP account, but would like to take out approximately 4 percent per year in monthly payments. Would this be subject to the 10 percent IRS penalty for withdrawals before age 59 1/2?

A. Since you will be retiring during or after the calendar year in which you reach age 55, your TPS withdrawals in retirement will not be subject to 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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