I will be retiring from civil service this year, age 57 will I pay the penalty when withdrawing my monthly TSP before 59 1/2?

[dmertz · Accepted solution]

No.  Because the TPS is the plan of the employer from which you will be separating from service in or after the age you reached age 55, you'll qualify for the age-55 exception to the early-distribution penalty.  The TSP should know your age at separation from service and use code 2 on the Forms 1099-R they send to you for distributions made prior to you reaching age 59½, indicating that you qualify for this exception, but if they use code 1 you can claim exception code 01 on line 2 of Form 5329 to eliminate the penalty.

If you take periodic distributions as an annuity, you'll also qualify for the exception for a series of substantially equal periodic payments.