Q. I am 56 years old with 38 years of service including military time which I bought. I am under FERS. I am seriously contemplating retiring any day now. Can I, at this age of 56, withdraw from my Thrift Savings Plan? What are the penalties, if any? What about the 20 percent that TSP automatically deducts? Also, what about the federal taxes?
A. Under the circumstances you describe, your post-retirement TSP withdrawals will be exempt from the early withdrawal penalty. Your withdrawals will be subject to federal income taxes for the year of the withdrawal, and there may be withholding taken from your withdrawals. See www.tsp.gov for details.