Originally Posted by maddpax1
Firebird 5825: any ideas on what to do with your TSP account when you retire?
If you retire prior to the year in which you will turn age 55, you will pay an additional 10% tax penalty to the IRS on any money you withdraw from your TSP account. If your birthday is on Dec 30th of the year, you are safe if you retire in January of that same year. Just has to be the same year you become 55. So...if you retire at 50, you can get to your TSP money, but it'll cost you 10% more in taxes on top of whatetver tax bracket you're already in.
I'm in a similar situation as you, but I'm 53, and was offered an early retirement back in Sept. I turned it down partly for the tax penalty reason I mentioned above, and also because I'm under CSRS and don't want to give up 4% of my pension for the rest of my life. I can tough it out another 23 months, I suppose......