Author Topic: accessing TSP money before retirement age  (Read 2956 times)


  • Walrus Stache
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accessing TSP money before retirement age
« on: May 31, 2012, 08:31:22 PM »
Has anyone here successfully implemented the MMM-approved 5 year pipeline rollover plan of annually transferring 401k money into a Roth IRA prior to age 57 without paying the early withdrawal penalty, and then withdrawing the money tax free from the Roth five years later?
I ask because I'm a federal employee with access to the TSP instead of a 401k, and it's not at all clear from reading the TSP literature that this rollover wouldn't be considered a partial disbursement, in which case I would be limited to one-time-only event and thus unable to do the annual rollovers to build the five year pipeline.  So I'm skeptical that this apparently brilliant plan is actually going to fly, and I'm not prepared to risk my future financial security on a hypothetical plan that no one else I know has actually made work.
There are other ways around the 10% early withdrawal (like 72t withdrawals and buying an annuity) but they don't provide the same level of income after we quit working, and would thus require us to save a larger portion of the stash in taxable accounts.  If I'm going to be stuck with those plans, then now is the time to start reallocating savings so as to minimize the tax bite.


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Re: accessing TSP money before retirement age
« Reply #1 on: June 01, 2012, 06:50:01 AM »
Ask on the forums.  MMM and ERE community has a lot more "on the way" people, ER has a lot more already retired who are more likely to have done this.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at Check out the Now page to see what I'm up to currently.


  • Bristles
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Re: accessing TSP money before retirement age
« Reply #2 on: June 04, 2012, 06:45:12 AM »
I haven't looked into what you're talking about, but I have been looking into the TSP personal loans for the last 6 months or so.  The rate just dropped to 1.375%, and I think the wife and I are going to do it.