Q. If I retire at my MRA, which is 56, with 31 years of service, will my distributions be subject to the 10 percent penalty if I am under age 59-1/2? A. No.
Q. My question has to do with choosing to withdraw my TSP account upon retirement. I understand I can leave my balance with the government and either choose equal payments for my expected lifespan or have the government purchase an annuity on my behalf. What I do not understand is the difference between choosing equal payments for the rest of my life and purchasing an annuity solely for myself? What are the pros and cons for each? I also don’t understand why I am also given a choice to choose a survivor benefit with my wife as the beneficiary should…
Q. I retired 2+ years ago under FERS with a substantial TSP account that I have not touched. I am looking at purchasing an annuity through TSP versus regular payments based on life expectancy (essentially the IRS required minimum withdrawals that I must start next year). I understand how the RMD is taxed. How will the annuity be taxed? Is there a source that explains the calculation?