TSP distribution at retirement


Q.  I would like to know the best way of accessing all the money in my TSP account while avoiding IRS early distribution penalties. Here is my situation:

* I am CSRS Offset and retiring on Jan. 31 with 30 years of service.

* I will turn 55  on Sept. 1, 2012.

* I have  $92,000 with the TSP.

I need to withdraw virtually all of my TSP account to pay off all my high-interest loans.  How soon can I withdraw the TSP account funds without the IRS early distribution penalty?

A.  Since you are retiring during the calendar year in which you reach age 55, your TSP withdrawals will not be subjected to the early withdrawal penalty. You should confirm this with your tax preparer before proceeding, however.



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.

1 Comment

Leave A Reply