LEOs and new TSP rules


Q. I understand that TSP is waiving the 10 percent penalty for LEOs who retire and are at least 50. This means that they can take an income or access their money from TSP without penalty. What if a LEO rolled/transferred their TSP to their own IRA after separation via a TSP-70 form and then began to access the funds from the new account? Would they be covered under this new rule since the funds originally came from TSP? Or would they be subject to regular IRA rules? 

A. Unless and until the rules for IRA withdrawals are changed, there is no exemption for early retirement covering an IRA account, regardless of the source of the funds. If you want to use this exemption, then you must stay with the TSP until you reach age 59 ½.


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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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