Workers' comp and TSP withdrawal


Q. I am below the age for Thrift Savings Plan withdrawal without penalty (soon to be 50), but it looks like I will be out on workers’ compensation under permanent disability shortly. Due to the impact on my income and an ongoing issue, I need to make a withdrawal or close my TSP to continue meeting my obligations. I have thoroughly researched the issue of using a TSP but have little choice. A loan is not an option (I’m paying one off and, if I’m on disability, I can’t take one out). And I’ve looked into other avenues, to include financial planners, with no success. Without focusing on the 10 percent penalty, how can I submit for my account funds? Although I am vested with more than 22 years, do the age criteria prohibit access to any funds that are not your own contributions? Due to the previous loan, is it impossible to access these funds to avoid a more onerous financial situation? I have an amount that would make us able to live on the disability funds. Is this a simple matter of age and letter of the law?

A. As soon as you are separated from federal service, you may request a distribution of some or all of your TSP funds. Before you separate, you may request a hardship withdrawal if you can qualify, or you could take a loan and then fail to pay it back, which will result in a distribution.


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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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