TSP and tax


Q. I am 58 years old and seeking retirement soon after my 62nd birthday. I would like to withdraw my Thrift Savings Plan when I am 59 1/2, in a lump sum. How much will I have to pay in penalties and taxes?  

A. It sounds like you will be taking an age-based, in-service withdrawal. The amount withdrawn from your Traditional account will be taxed as Ordinary Income. There will be no penalty for early withdrawal.


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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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