TSP withdrawal penalty


Q. I have finally reached my decision to leave government service and want to check on one last item. Since I am 56 I want to confirm that I will not be impacted by the 10 percent penalty on TSP withdrawals if I don’t take an annuity and set up a routine monthly withdrawal to cover me until I am 62 and eligible for my FERS annuity.

A. If you separate from federal service during or after the year in which you reach age 55, your subsequent TSP withdrawals will be exempt from the early withdrawal penalty. You’ll find this exemption listed on page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.


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

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