This may sound a fanciful scenario, yet recent events across Europe â including the looming independence referendum in Scotland â tell a very different story. Six days ago, the people of Spainâs most prosperous region, Catalonia, voted overwhelmingly for parties favouring the breaking away from Spanish rule.
1 If you are 55 or older and retired, you can withdraw from your TSP without being charged the 10% tax penalty (which is normally tacked onto early withdrawals) in addition to regular income taxes.
Non-qualified Withdrawal Tax Consequences. If you are cashing out and it's not a qualified withdrawal, you get all your contributions out tax-free and penalty-free first. Then, you pay taxes and a 10 percent additional tax penalty on the earnings you take out, unless an exception applies to your situation. For example, say you've put in $44,000 to your Roth IRA and it's grown to $60,000. If you cash out with a non-qualified withdrawal, you'll get your $44,000 tax-free, but the $16,000 in earnings count as taxable income and are subject to the 10 percent additional tax penalty.