TSP penalties


Q: If I retire from active duty military service at the age of 42 after 20 years of service, can I withdraw from my TSP without tax penalties? Can I withdraw from my TSP after the age of 59½ with no tax penalties?

A: Unless you use the money to buy a life annuity, take the money as a series of Substantially Equal Periodic Payments under IRS rules, or meet one of the other specific exceptions, you’ll have to pay the penalty for withdrawals taken before your reach age 59½.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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