A new client has to submit paperwork for a distribution due to divorce pertaining to a Thrift Savings Plan. There doesn’t appear to be a place on the form for a direct transfer to an IRA. Is payment to her, with the 20% withholding, the only alternative?
She is younger than 59 1/2, but doesn’t think the 10% penalty applies to distributions of this sort. I can’t find any information that would confirm that, so my sense is that any amount she doesn’t rollover would be subject to the 10% early withdrawal penalty.