Browsing: medical

Terminal cancer and TSP early withdrawal


Q. I will most likely be medically separated from the military next year after 25 years of service.  I have bone cancer that is incurable but manageable — 50 percent life expectancy is 10 years. I am 47, so if I live 10 years, I would be 57 and still ineligible to withdrawal my Thrift Savings Plan. Are there exceptions for terminal disease that allow you to withdraw early without penalty? A. The list of available exemptions appears on Page 7 of the notice at

FERS retirement with a TSP loan


Q. I am 63 years old, in FERS, have 25 years of service, and have worked for the same agency my entire government career. Because of medical conditions, I need to retire within the next two months. I have an outstanding $20,000 loan and will not be able to repay it before retirement. I have read a lot of what might happen: 10 percent penalty, etc. But could you explain what would be the best course of action and how the outstanding loan will be treated. I would like to use part of my Thrift Savings Plan for medical bills. A. If…

TSP withdrawals and taxes


Q: I had to retire from federal service because of medical reasons, and I was granted the medical retirement in 2009. I had to withdraw all my TSP  funds in order to survive. I was 57 years old and I had 20 years of time, however, I did buy back three years so it should have been considered 23 years of federal service employment. Can someone tell me what to expect with my 2009 income taxes, such as penalties and taxes? A: Your federal service record has no impact on the taxation or penalties imposed on TSP withdrawals. The money you have withdrawn…