Penalty for Withdrawing From TSP

March 24, 2015 5:09 AM
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Q: I am age 64 and retired from GSA in 2008 under the Civil Service Retirement System (CSRS), having worked 36+ years. Is there a penalty for me to withdraw some or all of my TSP before age 70 1/2 ? I am widowed and get no Social Security from my deceased husband’s Social Security and I sure could use some of it now.

A: You will not be penalized for taking money from your TSP at your age. The penalties are for those who separate and withdraw money before they turn the age of 55 (10%) and for those who fail to take a required minimum distribution after 70 1/2 (50%). Someone your age will not face any penalty when withdrawing.

The TSP withdrawal rules are rather restrictive and you should review their publication, Withdrawing Your TSP Account When Leaving Federal Service.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

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About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.