Browsing: early withdrawal

Q. I am 62 years of age and have been in civil service for 12 years. Can I withdraw a portion of my Thrift Savings Plan funds prior to retiring and leave the rest in? If so, I realize I will have to pay tax on the amount withdrawn (but not sure how much), but will I have to pay a penalty?  Also, can you direct me on where to go to do a withdrawal? I am currently in Okinawa working for the Marines. A. You may take one age-based, in-service withdrawal, which will not be subject to an early withdrawal…

Q. I left federal service in 1998 after almost seven years. I left the Thrift Savings Plan intact and have seen it grow quite nicely. It is approximately $95,000.  My husband has been in federal service since 1995 and will most likely stay in until retirement age (we are both 49 yrs old). My husband’s TSP has also grown nicely. However, being a stay-at-home mother of five, we are seriously struggling. Our oldest child is two years away from college and our next oldest will be starting at a very expensive parochial high school in September. Our other children are 11, 9 and 3. Our biggest…

Q. I am a contractor in between jobs and would like to withdraw my Thrift Savings Plan. If there are any owed monies to the government, will that be taken from my TSP?  How much tax will be taken from me if I do a lump sum? And is there a difference in taxes if I do a monthly payment? Lastly, is there a hardship exemption rule if unemployed? I am retired from active duty (20 years) and 42 years old. A. There is an “it depends” at the beginning of the answer to each of your questions and I can’t…

Q. I am a 54-year-old letter carrier with 24 years postal and nine years military. According to Senate bill S.1789, will I be eligible for early retirement? What about the Social Security supplement? How does this affect my Thrift Savings Plan? Can I get that also? A. You will have access to your TSP account for retirement income as soon as you separate from service. You will be subject to the early withdrawal penalty until you reach age 59½ unless you qualify for one of the exceptions listed on page 4 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. Note that one of the…

Q: I’m tired of moving funds all over the place trying to maximize my money in the Thrift Savings Plan. I have done so-so — retired federal law enforcement, 30 years of service, now 51 years old. I am going to start withdrawing funds at 59 1/2. I want to maximize my value in eight or nine years. I know it is hard to have the best of both worlds (safety of funds vs. maximized rate of return) — what are your thoughts? A: I can’t possibly give you reliable investment advice through this forum, without the appropriate understanding, research…

Q: I am 51 and will retire from federal law enforcement after 24 years of service. Will I have to pay the 10 percent penalty for early withdrawal?  I was always told the federal hazardous duty act exempted me from the provision. A: It is my understanding that the exemption applies only to withdrawals from a defined benefit pension plan, and not to withdrawals from defined contribution plans like the TSP. Check with a CPA to be sure before you proceed.

Q.  I am 58 years old, in FERS, and plan to retire in two months. I am going to roll over my TSP into an IRA and take a large disbursement to pay some bills and get set up. I understand, at retirement, that this one-time disbursement will not be subject to the 10 percent early withdrawal penalty. However, I have an outstanding loan balance with my TSP. I wanted to use part of my disbursement to pay this loan off, but have been told by TSP it will be considered another disbursement — but it will not be subject…

Q. With talk of the Postal Service downsizing I was wondering:  I am 48 years old, have 25 years at the Postal Service and four years active military.  I realize at 25 years I can retire, regardless of age.  But can I access any of my TSP without penalty or must I wait until my MRA of 56?  How about the Special Retirement Supplement? Mike Miles: A.  If you retire before the calendar year in which you’ll reach age 55, your TSP withdrawals will be subject to the early withdrawal penalty until you reach age 59 1/2, unless you can…

Q: I know I can receive a monthly payment once I retire, I can take all my money out when I retire, and I can leave my money in TSP until I am 70 1/2. Someone told me that there are some restrictions about  taking my money out. I am 58 and have 35 years service so when I retire I intend to keep my money in TSP. I know that when I am 70 ½ I have to start taking money out. I want to know if, say five years down the road, I decid I want to take…

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