What penalties can you incur for withdrawing funds from your TSP early?

Withdrawing funds from your Thrift Savings Plan (TSP) before reaching age 59½ typically incurs a 10% early withdrawal penalty, in addition to regular income tax on the distribution amount. This penalty may be waived under certain circumstances, such as disability or substantial medical expenses. Additionally, if you withdraw funds before age 50 and are still employed in a federal position, you may face additional restrictions on accessing your TSP. It's essential to consult with a financial advisor or TSP representative to understand the specific implications for your situation.