Penalty for early withdrawal


Q. Hello, I’m a CSRS Special Agent that is planning to retire on Jan. 2, 2015. I also have been contributing to the Thrift Savings Plan. During a retirement seminar we were told that as law enforcement officers, we are allowed a one-time-only withdrawal from our 401(k), as long as we are 50 and older. We were also told that we are subject to income tax; however, we are exempt from the 10 percent early withdrawal penalty. Is this correct? Please advise.

A. This is not true. If you retire before the calendar year in which you reach age 55, your withdrawals will be subject to the early withdrawal penalty unless you qualify for one of the other exceptions listed on page 7 of the notice at So much for retirement seminars.


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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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