Discussion Forum

This forum is provided for informational purposes and it not intended to be relied upon as a source of investment, tax or legal advice. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of the 72tNET.com owners, or the sponsors or firms affiliated with the author(s). Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Please read our Forum Rules.

BEFORE POSTING: Use this TEMPLATE when submitting a new post. Make sure you understand all terms used in the template and double check your answers before submitting your question. Carefully review the SEPP Planning Pointers and materials under the Tools and Resources menu (IRS ResourcesGlossary, and Applicable Federal Rate table) before posting to make sure your question is clear and the answer you receive is accurate.

Subscribe to posts or edit your subscriptions by clicking on this link https://72tnet.com/community/subscriptions/ .

PLEASE NOTE: To avoid confusion, please do not add your question to someone else’s thread. If you have a question, please create your own post.

Clear all

Age 55 exception?

2 Posts
2 Users
Posts: 11
Topic starter
Active Member
Joined: 5 years ago

I have a friend that retired as a FERS employee from a federal agency 4 years ago.     The agency where she had worked contacted her last year after her husband died and convinced her to come back to work for them as a full time permanent employee.   To her everlasting misery, she made the mistake of believing the things they promised her and went back.

Well, suffice it to say they didn't live up to any of the promises they made her and she is now trying to figure out how to get herself out of this mess she created for herself.  She worked herself nearly to death on forced overtime the past year and managed to pay off her house mortgage 5 years early.   

Now, technically, she is already a federal retiree (returning to federal service didn't end her annuity; rather, they offset her salary dollar for dollar for her annuity).  So, if she leaves, she wouldn't be retiring but rather resigning her position with the agency.   She had been reading about the IRS exceptions to the 10% early withdrawal penalty for her Federal Thrift Savings Plan 401k and was thinking about setting up a 72t plan (probably what she should have done when her husband died, but didn't know she could have done it).

However, the way I see it, she doesn't need a 72t plan.  She did retire, but resumed working for the same federal agency.  She was covered under the same retirement system as before, FERS, and resumed participating in the federal Thrift Saving Plan 401k when she was rehired.   She will attain age 55 in February of next year.   I think that, if she resigns her position after the first of January 2023, the resignation would constitute a "separation from service in the year of age 55 attainment" and thus should allow her to begin penalty-free withdrawals from her TSP 401k plan.

Does anyone disagree with this assessment of the situation?




1 Reply
Posts: 32
Eminent Member
Joined: 5 years ago

Steltek, thanks for bringing this idea to the forum, it's good for us all to remember there are other methods to access retirement funds. Your idea sounds logical, and would save your friend the effort and risk of a 72t.  The retirement plan's documentation (SPD or something like that) will specify the details of their 55 and older rules for that specific plan. Hopefully your friend can have an honest conversation with the plan administrator to clarify her options. Good luck to her!