Ask The Experts: Money Matters

By Mike Miles

Exemption from TSP early withdrawal penalty

Bookmark and Share

Q. I am working, waiting for approval of disability retirement under FERS. Will I be penalized 20 percent if I withdraw my Thrift Savings Plan in lump sum when I am approved for disability? I was diagnosed with Stage II multiple myeloma in May.

A. The exemption from the early withdrawal penalty to which you are referring is for a distribution taken as a result of a total and permanent disability. The TSP cannot certify that you qualify for this exemption and it is up you, or your tax preparer, to demonstrate that you meet this exemption.

Tags: , , , , ,

Comments are closed.