Postal disability retirement


Q. I am a 55-year-old postal worker of 27 years who has a work-related medical problem. Last year, I was let go on “no work available status” and have been on workers’ compensation since. I have applied for postal disability and am waiting to see what happens with that. So far, I’ve received no letter of separation nor postal job offer. Will I be able to access my Thrift Savings Plan without penalty if I become separated from the Postal Service and am granted disability retirement?

A. The answer depends upon your specific circumstances. If you separate from service during the calendar year in which you reach age 55 or are totally and permanently disabled, you will be exempt from the early withdrawal penalty. Or, you may avoid the penalty by taking a series of Substantially Equal Periodic Payments.

The details are explained in the notice available at

Following is an excerpt from that notice:

If you receive a TSP distribution before you reach age 59½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable portion of the distribution not transferred or rolled over. The additional 10 percent tax generally does not apply to payments that are:

* Paid after you separate from service during or after the year you reach age 55;

* Annuity payments;

* Automatic enrollment refunds;

* Made as a result of total and permanent disability;

* Made because of death;

* Made from a beneficiary participant account;

* Made in a year you have deductible medical expenses that exceed 7.5 percent of your adjusted gross income;

* Ordered by a domestic relations court; or

* Paid as substantially equal payments over your life expectancy.


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 and view his blog at

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