TSP and SEPP

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Q. I Have $400,000 in the TSP at age 53. I am out of the government and I want to start SEPP. I have run 72t computations with single life expectancy option at 31.4 years, and the fed mid-rate interest, no more than 120 percent (using 1.5 percent in the computation, to be conservative and stay out of trouble). No problem on the five year or 59-1/2 requirement. After consulting with a CPA for the SEPP, we’re almost good to go, except for one question. Does the TSP calculate my monthly SEPP payment? Can they be relied on to do it correctly, or do we calculate it, have the annual amount divided by 12 to get monthly rate, then ask for that amount each month, which would be deposited, less the tax withholding? I am not sure the TSP has experience/supports SEPP and expect to have to file the 5329 to correct their 1099-R once I start SEPP.

A. The TSP does not support SEPP for the purpose of 72t requirements. You’ll have to make sure that you meet the requirements on your own.

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