Early retirement, w/drawal from TSP

[Fisherman]

if all works out, I plan to try to get an early out next year when I am 53 yrs old. I am CSRS, but will have $50,000 plus in my TSP. I plan to w/draw the TSP in one lump sum when I retire. I know I will have to pay income taxes, and a 10% penalty for early withdrawal. Anything else that I am missing? Thanks, and don't badger me about leaving it alone. I have my plan all mapped out.

 

[nnuut]

Welcome Fisherman, thats 20% Federal and 10% penelity and State Tax. They won't take out the state tax unless requested, I think. I made a one time withdrawal and had to pay a penility to the state because I didn't pay State tax on the money during the year. I believe you can save some money if you pay estimated tax to the State when you receive it.
Best of luck I'll be right behind you.
Norman

 

[Aviator_Guy]

I’m 52 and I’ve been looking at how to withdraw my TSP savings after I retire. From what I understand you will pay a 10 % penalty fee + Fed Tax on money distributed if you retire before age 54. But, if you turn 55 in the year you retire with the feds, you don’t have to get hit with that 10% tax penalty from that year on. If you retire with the feds CSRS or FERS before age 55, you have to wait until age 59 ½. I think to avoid that 10 % penalty.

I’m flying to DC in a couple weeks to attend a retirement seminar and I will ask them. The funny thing is they offer retirement seminars for folks who are close to retirement and don’t offer it to anyone else! LOL… I was lucky to have someone (civilian contractor) sit down with me when I entered civil service (USN) in 1985 and he put together a spread sheet for me to explain the magic of compound interest… Anyway, good luck with your retirement and have a nice day!!

 

[Fisherman]

thanks for the replies. I will be checking back for follow ups.

 

[KevinD]

I think theres a thing called section 72T to help avoid the early distribution penalty. It may be worth looking into.

http://www.investopedia.com/articles/retirement/02/112602.asp

 

[clester]

I think theres a thing called section 72T to help avoid the early distribution penalty. It may be worth looking into.

http://www.investopedia.com/articles/retirement/02/112602.asp

Go to www.72t.net it has lots of info and a calculator.