Penalty tax


Q: I worked 20 years for the postal service, from 1984 to 2004. I was 49 when I resigned. My Thrift Savings Plan money has remained untouched. I am 56 now, my MRA. Will I be subject to the 10 percent penalty tax, if I ask for monthly payments for a period of 10 years to start now? If yes, how can I receive my TSP money now without the penalty tax?

A: You’ll only avoid the penalty if your payments meet the IRS definition of Substantially Equal Periodic Payments. The rules for these payments can be complex and you should seek professional help before you proceed.


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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 and view his blog at

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