Early withdrawal with multiple TSPs


Q. I separated from the U.S. Air Force on 12/31/2015 at the age of 53. I had a Uniformed Services TSP during the duration I was in the Air Force. On 01/01/2016 I took a job at the same overseas base and received a civilian TSP at that time. I worked that job until 12/31/2017 and left federal employee for full retirement at the age of 55. I am trying to find out if both the Uniformed Services TSP and the civilian TSP would be exempt from the 10 percent early withdrawal penalty since I stayed in federal service until he age of 55 or if changing jobs would make the Uniformed Services TSP subject to the early withdrawal penalty and only the civilian TSP exempt from the 10 percent early withdrawal penalty.

A. The Uniformed Services account is not exempt under the age 55 rule, since you left the employment that was covered by that account too early to qualify. Why not combine the military money into the civilian account? This would get around the penalty. You should consult a tax accountant to guide you before proceeding.


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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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