By Mike Miles
May 19th, 2010 | Uncategorized
Q: I made a deposit to the Federal Employees Retirement System for 20 years of military service and have been working for the federal government for 10 years, which gives me 30 years of federal service. If I was to resign today, at age 50, would I continue to keep my military retirement pay until I reached my minimum retirement age (56) and could start drawing my FERS retirement? Will the FERS retirement consist of 10 years of Social Security Supplement, FERS and my Thrift Savings Plan payout, or would I have to wait on the TSP?
A: Because you are separating from service before the year in which you reach age 55, your TSP withdrawals will be subject to the early withdrawal penalty rules. There are exceptions to the penalty, however, which are explained in IRS Publication 590 IRS Publication 590 and in the tax notice at www.tsp.gov.