TSP withdrawal penalty


Q. When I first opened my TSP savings account back in the late 1990s, no one ever briefed me that there would be a specific retirement age attached to my account. I will be retiring in a year. I will have a total of 28 years of active federal military service. I will be 48 years of age at retirement. Will I have to pay a penalty to withdraw all of my money from the TSP? If I have to pay a penalty, what is it?

A. Yes, under the circumstances you describe, you will be subject to the IRS Early Withdrawal Penalty until you reach ag 59 ½ unless you qualify for one of the exceptions listed on page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. The penalty is 10 percent of the withdrawn amount.


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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

Leave A Reply