FERS account taxes


Q. I will retire in two years. If I leave my money in the TSP, what happens when I reach 70-1/2 and I  am forced to pay a certain percentage of my savings out every year due to my age. Does that mean I would have to pull all my TSP money out (pay taxes on it) to transfer it to another account in anticipation of the yearly deduction?

A. If you begin monthly distributions using form TSP-70 during or before the year you reach age 70-1/2, the TSP will automatically distribute the required amount each year. There is no need to leave the TSP while you are still alive.


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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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