Browsing: Tax

Q. I just read an article on IRS 72(t) and SEPP regarding withdrawal of funds from 401(k) (TSP) and IRA prior to age 59.5. I’ve never heard of this and haven’t seen it mentioned in your column either. Is there a specific amount of withdrawal I should be taking monthly according to IRS rules and calculations in order to avoid penalties? I retired at age 55 from the U.S. Postal Service on a VERA retirement (FERS) in March. I started withdrawal of TSP in May. Does this IRS 72(t) and SEPP apply to my situation? Will I be slapped with…

Q. I’m a Department of Homeland Security FERS employee (age 45, 25 years of service) under special category (law enforcement) for early retirement. I would love to retire this year, but do not want to get locked in until 59 ½ if I choose to withdraw TSP funds under 72(t). Is there another way for me to withdraw from my TSP without incurring a penalty? My suspicion is that I will have to wait another four years until I’m 50 with 30 years of service. 

Q. I am a member of FERS, and I am trying to gain a better understanding of my options for avoiding the 10 percent IRS penalty for early withdrawal. I am wondering what the impact would be if I resign from the federal workforce in my 40s to take a job in the private sector for a period of time (say until I am 55). Upon retirement from my private-sector job, assuming that I am able-bodied with no medical issues or high medical bills, is there any way that I can begin taking monthly payments from my TSP funds without…

Q. Hello, I will be 58 years old on November 9, 2018, and am a recent FBI retiree as of December 2017. I retired after 30 years and 4 months of FBI service. Briefly, I was told by our FBI TSP office recently that a new TSP withdrawal rule is now in effect. If any federal government employee retired after age 55 (I retired at age 57), they can now begin withdrawals from their TSP accounts without worrying about next year’s 10 percent IRS tax penalty. I need final verification regarding this matter. Thanks.

Q. I work for the Federal Bureau of Prisons and will be eligible to retire at 48 years old, with 25 years in federal law enforcement. I am familiar with the IRS additional 10 percent tax penalty for early withdrawals and some of the exceptions. I was curious to know if you could elaborate on the options that could possibly pertain to my situation?

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