Thrift Savings Plan Withdrawal

Danny7700 · ‎May 11, 2021

Is it correct, that a federal employee that separates from service anytime during the year they turn 55, can start withdrawing from their TSP without the 10% early withdrawal penalty?

LenaH · ‎May 11, 2021

Yes. If you receive a TSP distribution 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 not transferred or rolled over. The additional 10% tax generally does not apply to payments made after you separate from service during or after the year you reach age 55.

Important Tax Information About Payments From Your TSP Account

@Danny7700

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Anonymous · ‎May 11, 2021

https://www.forbes.com/advisor/retirement/rule-of-55-retirement/#:~:text=The%20rule%20of%2055%20is,c....

LenaH · ‎May 11, 2021

Yes. If you receive a TSP distribution 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 not transferred or rolled over. The additional 10% tax generally does not apply to payments made after you separate from service during or after the year you reach age 55.

Important Tax Information About Payments From Your TSP Account

@Danny7700

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"