Early TSP withdrawals for medical reasons


Q. I took a voluntary early out from the U.S. Postal Service in October 2012. I had 24 years with USPS and six years with the Navy. In May 2015, I was diagnosed with a low-grade brain tumor, which makes me unemployable because of seizures. Will this condition allow me to get early, monthly withdrawals from my TSP? I’m 57 years old. If there are any other government benefits for which I may qualify, please share them.

A. As specified in the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, there are at least two exceptions to the early withdrawal penalty that may apply to you. They are available for withdrawals: (1) made as a result of total and permanent disability and (2) made in a year you have deductible medical expenses that exceed 10 percent of your adjusted gross income (7.5 percent if you or your spouse is 65 or over).

See Page 7 of the notice for more information and consult a CPA or tax attorney for help in determining whether you qualify for an exception.


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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