Disability retirement

Forum|Forum|2 years ago
October 25, 2023
2 replies
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I retired early this year at the age of 48 on a disability retirement from government job. I was a federal law enforcement officer. I was allowed to take money out of my TSP (401K) and TSP took part of it for taxes. Will I have to pay the IRS any penalty for taking a partial disbursement from my TSP? If I didn’t get hurt on the job I would have retired at 52.

Ask the Experts - Extension - Sept 2023

emina

Level 5

Hello, thanks for joining us today!

If you receive a TSP distribution or withdrawal before you reach age 59½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10% of any taxable portion of the distribution or withdrawal not rolled over. The additional 10% tax generally does not apply to payments resulting from total and permanent disability.

Resource: https://www.tsp.gov/withdrawals-in-retirement/

Tax Rules about TSP Payments (437kb)

Anonymous

Hello and thank you for your question.

If you became totally and permanently disabled and received a distribution from a retirement plan before the age of 59 1/2 it is not subject to the 10% penalties for early distributions. You still need to report it as income.

Please see for more details

Retirement Topics - Disability

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-disability

I hope this answered your question

Thank you so much

Martha