Browsing: penalty

Q. We are getting ready to be offered an early retirement under the Voluntary Early Retirement Authority. I’m a Civil Service Retirement System employee, and I’m thinking about taking the offer. I would like to withdraw my Thrift Savings Plan, but I won’t be 55 until Feb. 22, 2012. Is there any way of getting around paying the 10 percent Internal Revenue Service penalty for early withdrawal under the age of 55? A. If you actually separate from service on or after Jan. 1, 2012, your TSP withdrawals will not be subject to the early withdrawal penalty. If you separate…

Q. I am retiring by the end of this year at the age of 56.  I read in the Thrift Savings Plan where you can take a one-time withdrawal payment. Do you have to pay a penalty? Do you have to take it at the end of the year? For example, if I retire in December 2011, will I have to wait until December 2012 to take the one-time withdrawal? Can I take a withdrawal as early January or February 2012? A. Once you’ve retired, the partial withdrawal is available immediately.

Q. I am under Civil Service Retirement System Offset. When I took the break in service, I withdrew my CSRS funds (about $50,000; probably $60,000 or more by now). That was in 1998, so I will have to redeposit if I want it to count toward my retirement. I will be 58 next month and am considering retiring in 2013. I have been putting $600 in my Thrift Savings Plan account every payday. I can withdraw money at 59½ and not pay penalties, but it seems like I will be double-taxed. When I withdraw the money from my TSP to pay…

Q. I plan to take an early out (Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay) effective Aug. 31, 2011. I am under the Federal Employees Retirement System plan. At the time of my retirement, I will be 54 years old. I have read that if you retire before age 55, your withdrawal/rollover is subject to a 10 percent penalty.  I have also read that any action can be postponed, but postponed to what age? 55 or 59.5? Does this mean I cannot withdraw and/or roll over to an Individual Retirement Account until I reach age 59.5? I don’t understand why I would have…

Q: I am pretty sure I know the answer to this question, but I thought I’d ask anyway. Is there some kind of penalty for a federal retiree to leave their TSP with the government at age 65 plus? A friend of mine told me that a man who is about to retire attended a retirement seminar and was told that if you leave your TSP with the federal government at age 65 you would be assessed a penalty. I do not believe this is the case. A: Not true. In fact, you won’t find a better deal anywhere else.

Q: I am 59 and retired from the post office since July 2009. I receive payments of $900 a month and would like to get a lump sum. Would I have to pay a penalty? A: If you’re receiving level monthly payments, not based on your life expectancy, and not incurring the penalty on those, then your lump sum will not incur the penalty, either.

Q: I have a question about withdrawing money from my Thrift Savings Plan account. I would like to know as many details as possible, to include penalties and how long it takes to receive my funds, as well as if I’m allowed to deposit a lump sum in the future to make up for what I took out. A: You’ll find the information your looking for at http://www.tsp.gov.

Q: Are there any special considerations in terms of penalty when withdrawing from my Thrift Savings Plan if I have a life-threatening condition such a severe aortic stenosis? I’m a 58-year-old Federal Employees Retirement System employee planning to retire on 2010 30 years of service. A: Since you will be retiring during or after the year in which you reached age 55, you will have access to your TSP account assets without penalty.

Q: I am a postal worker for 23-plus years of service. I am 45 years old. Is there a way to withdraw all my Thrift Savings Plan funds without penalties? If I can do this, I can bring down my mortgage and not be in a foreclosure situation. I do remember that President Obama, in his campaigning days, promised we could withdraw from our retirement funds. What happened to that? A: As an active employee, you would only be able to withdraw funds from your TSP account under the financial hardship allowance. Your withdrawal will be subject to penalty, however,…

Q: I plan to retire at the end of December 2009, and am thinking about cashing in some or all of my Thrift Savings Plan in 2010. I am on the Federal Employees Retirement System and I turned 62 this year. How much will I be penalized by TSP? I know I will pay income taxes on it in 2010, but I am wondering if I’ll get penalized, as well. A: You’ll pay taxes, but no penalties.

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