Q. I am looking at retiring next year, during the year that I turn 55. I qualify under the law enforcement officer firefighter provision. I would like to make a 100 percent withdrawal from my TSP. I am aware that this would put me in the 33 percent tax bracket, but would I be subject to the 10 percent tax penalty for early withdrawal?
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Q. I am eligible to retire next year at age 50 as a law enforcement officer under FERS. I plan on taking life expectancy payments from my TSP/401(k) as soon as I retire. If, upon retirement, I elect to transfer my TSP balance to a company like Vanguard, will I still be able to withdraw life expectancy payments from Vanguard and avoid the 10 percent early withdrawal penalty?
Q. The early withdrawal penalty is obviously different from taxes; so for Roth, if you take withdrawals during or after the calendar year you turn 55, you won’t be subject to the 10% early withdrawal penalty, but you will owe taxes on the Roth earnings? If yes, can you choose to take your withdrawals from the Traditional balance until you turn 59 1/2 and then start taking them from the Roth at that point in order to avoid the tax on Roth earnings?
Q. I will retire under the law enforcement FERS category at 52 with a $400,000-plus balance. Can I take out a $100,000 lump sum at retirement without a penalty and then roll over the rest into a personal IRA?
Q. My brother works for the U.S. Postal Service. He requested and received a distribution of $30,000 from his TSP account in 2014, before he turned 59 1/2. Accordingly, he will be taxed for IRS purposes and get hit with the 10 percent early withdrawal penalty. That I know. He lives in New Jersey where TSP contributions are not excluded for N.J. state income tax purposes. The question is as follows: Is the $30,000 distribution from his TSP taxable in full for NJ state income tax purposes? If so, seems like double taxation.
Q. You have answered a question of mine previously that when I reach MRA (age 56) with 36 years of service I will be able to withdraw TSP without an early withdrawal penalty. That’s fine, but I read a post about an individual who was under the firefighter/ law enforcement retirement criteria and would be subject to early withdrawal penalties up until age 59 ½. I’m a little confused; if I have met MRA but am under 59 ½ how do I not get a penalty and they do, when they have met the criteria for FF/LEO/ATC retirement?
Q. I will be 57 in 2015 and will have 34 years under FERS. I have a large balance in the ROTH IRA account in my TSP. If I retire before 59-1/2, will I be taxed on the money I withdraw from my TSP? I have $600,000 in the 401K and $300,000 in the Roth. I plan to leave the money in the TSP and take out $30,000 per month. A. Since you will be retiring during or after the calendar year in which you reached age 55, your subsequent TSP withdrawals will be exempt from the early withdrawal penalty.
Q. FERS employee, 25 years service, retiring under MRA (56 years old) + 10. Will receive annuity at 70-percent rate. Plan to take monthly TSP payments of $3,000 (able to change amount once every year). Just want to confirm that there will be no early withdrawal tax penalties for taking TSP before 59-1/2.
Q. I fell under FERS disability. What percentage will I be hit with on a full withdrawal of my TSP? I am under the 55 age limit. A. The withholding for federal taxes will be 20 percent. The tax and early withdrawal penalty you actually owe on the withdrawal will be calculated when you file your tax return for the year. Unless you qualify for one of the exceptions listed on the left side of Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, in addition to income taxes, your withdrawal will be subject to the 10 percent early withdrawal penalty.