In Service Distribution with TSP (post Office 401k)?

[jacobtn]

I am working a case with another agent, the client is 58 1/2 and is still employed but looking to retire soon. He works for the USPS. I know he can roll it to an IRA when he retires, but does the TSP allow an in service distribution at his age?

I seem to recall them allowing them before but do they have to be 59 1/2?

 

[pixie7618]

You are correct, he has to be 59 1/2

 

[Josh Landis]

I am working a case with another agent, the client is 58 1/2 and is still employed but looking to retire soon. He works for the USPS. I know he can roll it to an IRA when he retires, but does the TSP allow an in service distribution at his age?

I seem to recall them allowing them before but do they have to be 59 1/2?

The client does not have to be 59 1/2 to take an inservice distribution if he uses the IRS 72(t). The way it works is you must receive an equal distribution and it must go until age 59 1/2 or a minimum of 5 years. So, in your case since the clients 58 1/2, it would have to run until the client was 63 1/2, then he could do whatever he wanted/take how ever much he needed from the IRA. You don't want to mess this up though, bc the 72(t) waives the 10% penalty.