TSP Rollover


Q. My husband is recently retired on FERS Disability and is in interim status. He has roughly $75,000 in his TSP currently but he will not be 59 1/2 until April 2016. We want to have more money in our emergency funds. Can he open a regular IRA in his name now and then rollover the funds in his TSP into this new account after he turns 59 1/2 to avoid the 20% tax penalty?

A. Yes. The early withdrawal penalty is not 20%, it is 10%, and it does not apply to funds rolled over to an IRA.


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.

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