Q: I am a FERS employee who will be retiring in the year in which I will turn 70½, which will be in 2012. I am having difficulty understanding the timing requirements for withdrawing the RMD from my TSP account. I would like my first RMD to be a partial withdrawal from TSP of the lump sum required to be withdrawn; this would be followed by monthly payments starting a year later. Under the scenario above, would I have to take a RMD for the year 2012? Or does the RMD requirement start in 2013, the year after the year in which I reached 70½? If it starts in 2013, do I have to take a RMD by April and another RMD by Dec. 31 of 2013?
A: There are two sets of rules you’ll have to navigate. The IRS says you must take your first withdrawal, for 2012, by April 1, 2013. You must then take your second RMD, for 2013, by Dec. 31, 2013. The TSP says that you can take one partial withdrawal from your account, but you must do it before starting monthly payments. So, just make sure that you take the partial withdrawal for 2012 before you start the 2013 monthly payments. This could all occur during 2013 or be split between 2012 and 2013, at your option.