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- Change to the amount of periodic payment in TSP
Change to the amount of periodic payment in TSP
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lbones
Level 5
12-26-2023
02:30 PM
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I have a client that is receiving a periodic payment through the Thrift Savings Account (TSP) as part of her annuity. She is under 59 1/2 currently and she would like to change the amount that she is receiving. I know that if you are receiving a periodic payment and you stop it or it changes you can incur a penalty.
- Receiving installments based on life expectancy is one of the exceptions to the 10% early distribution penalty tax. However, the penalty can be applied retroactively if you stop your life expectancy installments or take additional money from your account within five years of beginning your installments or before you turn 59½ years old.
My question is, would this be applicable in the case changing to a higher amount? I am trying to prevent her from any kind of IRS penalty.
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