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“Hello, I am a retired 58 yr old federal employee that retired after 34 years of service. My wife and I are looking at buying a trailer and horse camping around the US. I have both a traditional TSP and a ROTH TSP. I want to know if there are any penalties if I withdraw $100,000 from either of my TSP accounts. I know any money from my traditional account will be taxed, but I was concerned about any penalties the IRS would impose.” Charles
As a Federal Employee, your eligibility to retire under the Federal Employee Retirement System (FERS) is determined by your age and number of years of creditable service. In most cases, you must reach your Minimum Retirement Age (MRA) to receive a full retirement benefit.
There are four categories of benefits in the FERS Basic Benefits:
Your MRA is determined by the year that you were born (this sounds similar to how social security configures your benefits but it is NOT the same). To determine your MRA, reference the chart below:
If you were born
Your MRA is
55 and 2 months
55 and 4 months
55 and 6 months
55 and 8 months
55 and 10 months
56 and 2 months
56 and 4 months
56 and 6 months
56 and 8 mo
56 and 10 mont
In 1970 and after
In order to qualify for an immediate, unreduced retirement you must meet the following criteria:
Number of Years of Qualified Service under FERS
Some federal employees want to retire before they are eligible for an immediate unreduced benefit. This is available under an early option however, it comes with penalties associated with it.
What is really important about Charles’ question, and what confuses many federal employees, is that to make the determination as to whether or not the penalty applies means looking at Age AND Years of Creditable Service.
If you want to retire and have at least 10 years of creditable service, you can do so but receive a permanent penalty of 5% for every year that you are younger than age 62.
For example, if you separate from service at age 57 and have 10 years of service, you will receive a 5% permanent reduction in benefits for every year that you are under age 62.
62 Full Eligibility
61 5% Penalty
60 5% Penalty
59 5% Penalty
58 5% Penalty
57 5% Penalty
25% Permanent Penalty
Having ten years of service is only PART of the equation. Do not forget that to retire from FERS with 10 years of service you need to calculate your age into that equation.
“Mr. Shilanski, Social Security Survivors Benefit question. I am under the FERS program and I plan to retire late this calendar year. I am 65 yrs old. I will have
I worked for the federal govt for 11 years. I was born in 1960 January. I was 56 at the time of separation. Need to know if postponement to a
At age 59 1/2, I would like to use a TSP one time withdrawal to pay off a mortgage then eventually transfer the balance to a IRA when I retire
Are you still allowed to contribute the maximum of $26,000 to the TSP even if you only work half of the year? Is there any advantage to maxing out your
Get the most out of your federal retirement benefits by taking advantage of the FERS resources created by Micah Shilanski, CFP®, and the team of independent financial advisors at Shilanski & Associates, Inc. Join the thousands of federal employees who trust us to guide them in their retirement planning journey because of our unique perspective of how your FERS benefits contribute to your comprehensive financial plan.
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