Leaving the military for civilian life can sometimes deal a financial blow to the unprepared. If you’ve contributed to the Thrift Savings Plan, cashing out early – before age 59 1/2 – won’t just rob you of the money you’ll need for retirement. You will also have to pay taxes on the withdrawals, and typically have to hand over a 10 percent penalty.
Planning ahead is essential to ensure financial health during retirement. Chances are you’ll need to keep building your savings to ensure a comfortable retirement. So, before you fall out of the habit, start contributing to your new civilian retirement plan. It’s important to keep your retirement savings momentum. However, if you reach a point where you may have to withdraw funds from your retirement savings accounts, seek proper counsel. Before you decide to make a withdrawal from TSP, get advice from a financial professional, visit the TSP website at www.TSP.gov, and consider the pros and cons.
Coyote quote: “Experiences are savings which a miser puts aside. Wisdom is an inheritance which a wastrel cannot exhaust.” – Karl Kraus