Q. If my position is eliminated, when am I eligible to receive any of my retirement benefits? I’m almost 48 with a little over 24 years of federal service and I’m under FERS. Also, what kind of penalties would I incur by withdrawing funds from my TSP accounts?
A. Because you would not meet the age and service requirements for early retirement, your only immediate benefit would be severance pay. If you left your contributions in the retirement fund, you would be eligible for a deferred annuity at age 60. If you are covered under the Federal Employees’ Group Life Insurance program, you would receive a 30-day extension of that coverage at no cost to you. You would also be offered an opportunity to covert to an individual policy for which you would pay the premiums. If you are covered under the Federal Employees Health Benefits program, you’d receive 30-day extension of coverage at no cost to you and the opportunity to extend that coverage for up to 18 months under the temporary continuation of coverage provision of law. You would pay the full cost of the premiums plus 2 percent to cover administrative costs.
Also, You’ll incur the 10 percent penalty on withdrawals from your TSP account until you reach age 59 1/2 unless you meet one of the exceptions specified in the notice at https://www.tsp.gov/PDF/formspubs/octax92-32.pdf.