Q. I will be 52 years old March 9. I am covered under FERS, and I have 31 years of federal service. If my base offers an early-out this year, I plan to take it.
I have a substantial balance in the Thrift Savings Plan and would like to withdraw it in its entirety when I take the early-out so I can invest it in my daughter’s business.
1. Will I be penalized for withdrawing my TSP funds early? If so, how much? I know I will be taxed, and I am OK with that. My husband plans to keep working. He is a GS-12, retired military and we have no bills, so we will be fine.
2. I know I cannot draw Social Security, and I don’t plan to do so until I reach the required age. In the meantime, will I be eligible for the special retirement supplement if I retire now? If not, at what age will I be eligible, if at all?
A. Reg: If you accept your agency’s offer of early retirement, you’d be entitled to the special retirement supplement when you reach your minimum retirement age, which is 56. The SRS will end at age 62, whether or not you apply for a Social Security benefit.
Mike: Unless you are sufficiently disabled or have massive medical bills, you will pay the 10 percent early withdrawal penalty on the lump sum.