Browsing: early withdrawal penalty

Q. My husband plans to withdraw all his money from the TSP with an in-service withdrawal when he turns 59½ in November. A portion of his account is a Roth that will not meet the five-year rule until January. For tax purposes, it is best that the withdrawal be made in November rather than January. He does not have an outside Roth set up, but I (his non-working spouse) have had an outside Roth account for more than five years. Is it possible to deposit my husband’s TSP Roth portion into my Roth account in November and then withdraw it in January…

Q. If I retire at age 56 in January 2017 with 20 years’ federal law enforcement service with the Federal Bureau of Prisons, will there be a cap on the amount of money I can earn in 2017 and each year after while drawing the FERS supplement along with my pension? Also, if I draw out a one-time lump sum from my TSP to build a small cabin, is that considered earned income and will it cause me to lose my FERS supplement? What will be the tax rate for the TSP lump sum withdrawal at age 56? Will I…

Q. I took a voluntary early out from the U.S. Postal Service in October 2012. I had 24 years with USPS and six years with the Navy. In May 2015, I was diagnosed with a low-grade brain tumor, which makes me unemployable because of seizures. Will this condition allow me to get early, monthly withdrawals from my TSP? I’m 57 years old. If there are any other government benefits for which I may qualify, please share them.

Q. I plan on retiring Dec. 31, 2017. I will be 56 years old — my minimum retirement age — with 33½ years of service. I’m employed in a covered law enforcement position (DHS-CBP). My current TSP balance is approximately $465,000, and I only contribute to the basic TSP, not the TSP Roth. I would like to take a partial ($100,000) at retirement to pay off my house and also take a monthly set amount. Can I do both? Would I be subject to any early withdrawal penalty (under age 59½) on the partial $100,000 that I would use to pay off…

Q. Recently, legislation known as the Defending Public Safety Employees’ Retirement Act was passed, which would amend the tax law to allow special category employees to withdraw money from TSP accounts prior to age 59½ without incurring the 10 percent IRS tax penalty. I am a military technician with 33 years of service. I know military technicians are special category employees. Would I qualify for this provision?

Q. I retired as a federal law enforcement officer with 26 years of service at age 48 in 2015. Then the law was passed to allow those who retire the year they turn 50 or after to make penalty-free withdrawals. I’ve read about the IRS rule of 72(t) option and to me it seems as if — as long as I wait until I turn age 50 and invoke the rule of 72(t) — I should be able to make additional withdrawals without incurring the penalty. Is there an exception for those FLEOs who are allowed to retire with 25 years…

Q. I am a military technician and was told I’m under a special military technician early retirement 50/25 and will have 34 years of service, 4 years of which was active duty. I bought back my time and plan to retire in December. I will be 54 years old. If I start withdrawing from my TSP, will I be penalized 10 percent because I’m not 56 years old yet?