Ask The Experts: Money Matters

By Mike Miles

TSP and early retirement, redux

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Q: Your response to an earlier question on Voluntary Early Retirement Authority/Voluntary Separation Incentive Payments puzzles me. If a federal employee is eligible for a retirement annuity under the Federal Employees Retirement System despite the fact they are taking an VERA/VSIP, why would there be a penalty for “early” withdrawal of TSP?

A: I think that I clearly stated a fact (“There is nothing in your question that will exempt you from the early withdrawal penalty.”) that answers your question.

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Comments

  1. Teresa Says:
    April 29th, 2010 at 3:20 pm

    If he were retiring in the year he turns 55, the early withdrawal penalty wouldn’t apply ….

  2. Jyoti Shah Says:
    August 17th, 2010 at 3:08 pm

    Two to three years ago i took hardship loan due to injury at job and my case was denied one year i use my non pay staus form I m still disable to perform duty however i m receving work comp salary t0 % of allowed salary. thrift saving plan monies i can not re deposit my monies due to financial strain what are my liability tax implication and penalties

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