Q. I am eligible to retire under FERS in January 2016 — at age 56 with 36 years of continuous federal service — and begin drawing a pension. As such, I am able to withdraw from my TSP without incurring the early withdrawal penalty. I am also eligible for the Social Security supplement. If I retire from federal service, begin drawing my pension, and take a job with a private company or start my own business, I understand that I will lose the Social Security supplement if my gross income exceeds a certain threshold, but will I still be able to…
Browsing: early withdrawal penalty
Q. I am retiring at age 50 as a federal law enforcement official at the end of the year. I would like to make penalty free withdrawals from my TSP starting next year. Can I make monthly withdrawals from my TSP account in the amount of my choosing without incurring the 10 percent early withdrawal penalty? I would not change the amount of the TSP monthly distributions until sometime after age 59. The TSP computed payments based on my life expectancy were too low of a figure.
Q. I retired as an air traffic controller at age 50 in 2008. In order to take money from TSP, I had to do it based on life expectancy. Now at 57 I want to make a one-time withdrawal. I’m being told I will not be able to do this for some reason (which is not clearly stated anywhere). Why is this? Where is it stated I cannot make a withdrawal? What are my options now?
Q. I have been out of the service now for over two years and have about $25,000 in my TSP account. I am in the process of buying a house and was considering closing my account to help with the cost. What would the penalties be for California, and would this be a terrible financial decision?
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?
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.