RMD from TSP and IRAs


Q. My first required minimum distribution at age 70½ was made in August, when I took the total RMD required for both my IRA and Thrift Savings Plan accounts from one IRA fund. However, I have just received my notice from TSP stating I must make a withdrawal by April 1 from the TSP account to avoid dire circumstances. I am not clear on whether what I have already done meets my obligations for the first withdrawal, based on two of your answers concerning this matter.

Q: “Also, I thought if I have other IRAs, I could take the RMD from those and leave my Thrift Savings Plan unscathed. If I withdraw the entire account balance from my TSP, I will have to pay federal tax on whole amount. Can you clarify?
A: Unfortunately, the TSP does not allow you to waive the RMD for your TSP balance. It must be taken from your TSP account.”

Q: “Can I add all of my accounts together — IRA and Thrift Savings Plan — compute the required minimum distribution, and then withdraw from one account?”
A: “…but you may take your RMD from any account or accounts you wish. You should leave your TSP account untapped for as long as possible.”

If the original RMD I made in 2013 meets the requirement for the TSP account, should I notify TSP in some way that this has been done so they do not withdraw it again on April 1 and mail to me? I have made my one withdrawal allowed back in 2009 and do not wish to change to monthly withdrawals, an annuity or a total lump-sum transfer to another IRA. Are yearly RMD withdrawals allowed?

A. I’m sorry for the confusion. You must take your TSP RMD from your TSP account. You will have to begin monthly withdrawals, and I suggest that you use fixed monthly withdrawals since they may be changed in the future and the TSP will send you an extra payment, if necessary, to make sure that your RMD is taken each year. Annual withdrawals are not allowed.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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