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Thrift Savings Plan (TSP)

L1: Thrift Savings Plan (TSP)Iam a U.S. Government Civil Service Employee who plans to retire in January 2008. I will be 52 years old and plan to immediatley withdraw funds from my TSP. My understanding is that I can avoid the 10% tax penalty by taking substantially equal payments over my life expectancy (over 30 years). Can I use the same number of years as thelife expectancy and take a fixed amount and thus avoid the 10% penalty? Based on calculators on the TSP website, by using the actual life expectancy table the initial and early retirement yearmonthly payout is substancially lower and gradually increases year by year.By using the samelife expectancy number of years and calculating a fixed dollar amount gives me the money I need early in retirement and seems tobe my best option, unless of course if I have to paythe 10% tax penalty. Please advise, thanks2007-05-03 17:08, By: rusty, IP: [24.115.226.166]
L2: Thrift Savings Plan (TSP)Take this with a grain of salt, because it comes from a very cursory review of the TSP website.
The TSP seems to offer a 72t plan, but only using the IRS approved RMD method. I have no idea how efficient the plan is in assisting with the required annual RMD method calculation. Your other option would be to transfer the balance to a traditional IRA or IRAs, partition the IRA to get the optimum account balance and start a 72t plan from the IRA. Since you are separating prior to age 55, any withdrawal from the plan must be strict 72t requirements to avoid the 10% penalty until you are 59.5. A 72t plan must last until you are 59.5 if started before you are 54.5.
Jim, another poster here, is personally familiar with the TSP as I recall, and perhaps he will confirm whatoptions you have directly from the plan.2007-05-03 18:01, By: Alan S., IP: [24.116.66.98]

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