Rule of 55 for Thrift Savings Plan

The rule of 55 is something that applies to workplace retirement plans including the TSP. It gives FERS retirees access to their TSP prior to age 59.5 that applies to IRAs. It's important that federal employees understand what it is and who it applies to.
If you need help with your retirement planning and would like to schedule an introductory call you can do so here. calendly.com/b...
My website
bobbfinancial....

[@Milkman3572000]

Im 55 and this is the first time hearing this. Very interesting.

[@timothyhuynh559]

Thank you for this video - very helpful. My father recently retired with a TSP, and he is 58. Can he withdraw from his TSP multiple times without incurring a 10% penalty? If he retired in October 2023, is there a time limit for the penalty free withdrawals?

[@FederalRetirementPlanning]

As long as he retired in the year he turned 55 or later he can access it anytime w/o penalty

[@billpeterson178]

Great video. I just stumbled on the rule of 55 today, never heard of it before. How long has it been around? I fully retired from Dept of Commerce in 2019 at the age of 56. The following year, still age 56 I closed my tsp account and at time, tsp withheld 10% for early withdrawal. Is there a way I can get that back?

[@FederalRetirementPlanning]

That’s odd. I can’t imagine why they would have a 10% penalty. However, they probly withheld 20% for federal income tax

[@billpeterson178]

hmmm. I'll have to double-check. Thanks@@FederalRetirementPlanning

[@reynaldotorres4349]

Great, I couldn't find this rule of 55 info on the TSP webpage. Question, what about if I retire at 52, for how long Ill pay the 10% penalty? forever or until I turned 59 1/2 ?

[@FederalRetirementPlanning]

yes, unless you are special category FERS. Regular FERS would have to wait until age 59.5 to avoid the penalty

[@Lillylim1]

I am 56 and 6 months on Dec 4, 2023 with 34 years of Federal service. I am eligible to retire. I talked with TSP representative, they said that I have to pay 10% tax for IRS because I am not 59 and a half also including the 20% taxes included. May you please let know do I pay 10% penalty tax from IRS before 59 and a half if I retired this year? 🙏 thank you❤

[@FederalRetirementPlanning]

No, they told u incorrectly

[@SteveMarble-b1i]

Is it only when you turn 55? I plan on retiring at 57, but with my military buy back of 4 years, with about 37 years. Will I have a penalty?

[@FederalRetirementPlanning]

Negative, no penalties if u retire at 57

[@dawnriley2840]

So, retiring LEO, with 23 yrs in yr i turn 50 no longer gives me full access to my tsp w/o penalty? Is the penalty 10%?

[@FederalRetirementPlanning]

That absolutely gives you access penalty free

[@user-ie1iz6uz6o]

So if retired LEO you can’t access your IRA until 59?

[@FederalRetirementPlanning]

Correct. Unless u set up 72t payments or take the 10% penalty

[@JeremyGo-GoYears]

Thanks for the video. So if I turn 55 in October but separate from service in February several months before I turned 55 I can still take advantage of this and draw down from the TSP without penalty because I separated from service in the year I turned 55? Thanks

[@FederalRetirementPlanning]

Correct