Penalty exception?


Q. I recently retired as a federal law enforcement officer at age 50 after 25 years of service. I am able to presently withdraw a monthly set amount from my Thrift Savings Plan without the 10 percent penalty, correct?  May I also reduce the 20 percent tax withholding TSP imposes on me?

A. Based on the information you’ve provided, you will be subject to the early withdrawal penalty unless you take your payments as a series of Substantially Equal Periodic Payments under Internal Revenue Service Rule 72t. There is no exception to the early withdrawal penalty for LEOs. The usual rules apply. You may reduce or waive the automatic withholding. See the notice at for details.


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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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