Discontinued service


Q.  I am 49 and a postal employee under FERS with 24 1/2 years of service.  My job has been abolished and the whole RIF process ends on Sept. 9 of this year. I turn 50 before that date so I could possibly qualify for a Discontinued Service retirement or involuntary separation. If I retire under those circumstances, is there a TSP early withdrawal penalty incurred under an involuntary retirement?  Would I be eligible for the Social Security supplement as well?

A. You would only be eligible for the special retirement supplement when you reach your minimum retirement age, which in your case would be 56.

Also, You will be subject to the early withdrawal penalty until you reach age 59 1/2 unless you can meet one of the exceptions listed on page 4 of the notice posted at: https://www.tsp.gov/PDF/formspubs/octax92-32.pdf.




About Author

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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