Browsing: early withdrawal penalty

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?

Q. I am a separated federal employee, not of age and I am on Office of Workers’ Compensation Programs federal disability. I’m going to do a TSP early withdrawal. I have a few questions that I could not find while researching my options:  1)  Being on federal disability, can I even apply for financial hardship withdrawal? 2)  What is the difference (if any) between financial hardship withdrawal & early partial withdrawal? Is there any benefit filing one or the other? 3)  At the end of the year I know I’ll have a 1099 and there is a 10 percent penalty.…

Q. I am a federal dual-status technician with the LA guard. I am 50 as of March 2018 and will have 28 years federal technician time on Sept. 22, 2018. Can I voluntarily retire and draw my FERS retirement, the supplement and my TSP  without being penalized the 10 percent? My actual minimum retirement age is 56 years and 8 months.

Q. I am a single/divorced female, 58 years old, and I have 38 years of federal civilian service. I retired December 30, 2017, with a small outstanding TSP loan balance – less than $900. I have about $55,000 in my TSP. I had previously left the federal service (eight years ago) and used my TSP balance earlier in my career. When I reentered the federal civil service I reinvested in TSP and currently have a balance amount of $55,000. I’m considering requesting the full amount of my balance. Will I be penalized if I do not pay this small loan back…

Q. I just retired from the U.S. Postal Service as a FERS employee at 56 years of age. I have two outstanding loans against the TSP. My question is that if I elect not to pay them off within the 90 days and pay the tax on it for 2018, would that count as earned income against the $17,400 I am allowed to earn before being penalized on my Social Security supplement bridge? I am guessing that I would only be penalized 10 percent for early withdrawal in which case it still might be best for me to pay it off as…

Q. My spouse is a U.S. Marshal retiring at age 51 with 28 years of service retiring next month. The question he has had a hard time getting answers to is transferring his TSP to an IRA and receiving monthly payments. He would like to transfer his TSP to an IRA to maximize his investment options, but is concerned if he takes immediate withdrawals that he will be forced to pay a penalty in addition to taxes. Is TSP the only option to taking immediate withdrawals before age 59.5? Can immediate withdrawals at 51 be made at firms such as…

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