20 percent?


Q. I am a 66-year-old female who retired in January 2007, with more than 30 years Civil Service Retirement System service. I am thinking of withdrawing my Thrift Savings Plan savings. I understand that I will not be penalized the 10 percent, and I would have to pay the mandatory 20 percent if I decide to withdraw. Does the 20 percent also apply at age 70½? Does this also apply to partial withdrawals, and do you have to pay back if you do a partial?  Is the amount taxed by the Internal Revenue Service on your entire TSP earnings? What percentage would IRS use?

A. You should review the information available at www.tsp.gov and, in particular, the notice 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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