What Are the Best Retirement Dates for Law Enforcement Officers?

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By on October 3, 2017 in Q&A, Retirement with 0 Comments
Federal law enforcement officers wait to shoot at a gun range

Federal law enforcement officers wait to shoot during the 4th Annual Bowling Pin Shootout – July 22, 2011. (U.S. Air Force photo/Staff Sgt. Andrew Satran)

Q: I read your article on the “best day” to retire and wonder if there are any special considerations for Law Enforcement Officers?

A: Thanks for your question. Yes, there are special considerations for some LEOs and other special category employees. One concern that I overlooked in my article (my apologies) was penalty-free access to the Thrift Savings Plan.

Special category employees are exempt from the early withdrawal penalty if they separate from federal service in the year they turn age 50 or later. Special category employees who began their career in their early 20s are eligible to retire before the year they turn 50 if they have 25 years of qualifying special category service.

Example

Let’s say that Chris became a Special Agent right out of college at the age of 22.  She will have her 25 years of qualifying law enforcement service at the age of 47 and will be eligible to retire at that time.  If she retires before the year in which she reaches 50, she will face an early withdrawal penalty on anything she takes out of the TSP until she reaches the age of 59 ½.  She would, however, be able to avoid the penalty if she followed a life expectancy based withdrawal methodology for five years or until she reaches the age of 59 ½, whichever is longer.

If, on the other hand, she waits until the year in which she reaches the age of 50, she will be exempt from the penalty thanks to HR 2146.

Bottom Line

Any special category employee who would be 49 on December 31st would be giving up their penalty free access to the TSP if they left on that date. Of course, they would not receive a January annuity payment if they waited until January to retire, but ten years of penalty free access to the TSP might be worth it. They would also want to leave by the end of the leave year (January 6th this year) if they were going to cash in any annual leave above their carryover amount.

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.

© 2020 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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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.

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