I was RIF'd... I'm in my mid 40's - can I leave my TSP balance there and make withdrawals at 55?

[Anonymous]

I can not find a job that pays equivalent to my Federal salary but have found employment. I thankfully have a sizable amount in my TSP. I want to leave it there because of the low transaction costs and it's in a lifecycle fund. I have about 8 years until I turn 55 and then would like to pull out 3-4% per year to help bridge the gap and pay for kids college. Can I do that without penalty? I know that I will pay tax but have lower taxable income unless I find something better by then.

[Anonymous]

No, the Rule of 55 does not apply to legacy retirement plans.

[Anonymous]

No not without penalty.

The rule of 55 only applies if you separate from the federal government after 55.

Do not roll it out because then you lose the rule of 55.

Just continue applying to jobs and perhaps you can get back in and then leave after 55.

[Anonymous]

Good recap of the rules here:

https://www.fedweek.com/tsp/early-access-legally-avoiding-penalties-on-tsp-money/

[Anonymous]

Anonymous wrote:No not without penalty.

The rule of 55 only applies if you separate from the federal government after 55.

Do not roll it out because then you lose the rule of 55.

Just continue applying to jobs and perhaps you can get back in and then leave after 55.

For the federal government, I believe the age threshold is 50. For private sector jobs, it's 55.

[Anonymous]

OP, look into SEPP payments.