IRS penalty for early retirement?


Q. I am a 53-year-old CSRS employee with 31 years of service and I am contemplating taking advantage of any early-out retirement option if offered next year. I have heard rumors that the Internal Revenue Service has a rule in place that states that if I retire before age 59½, it will assess a tax penalty of 10 percent on my annuity amount for having retired early? I realize there is a penalty on the Thrift Savings Plan part, but I have never heard of tax penalty on federal pension due to early retirement.

A. Not true.


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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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