Q. I retired Dec. 29 at the age of 70 years and five months. I plan to take my Thrift Savings Plan money out, according to the Internal Revenue Service required minimum distribution table, which I understand I must begin no later than April 1, 2014, the year after the year I turn 70½. However, I may decide to take my one partial withdrawal, as well, and at the latest possible time. I’m pretty sure I read that I must make that withdrawal option effective by Dec. 31, 2013, the year I turn 70½, but now I can’t come up with…
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Q. It is my plan to continue working past age 70½, which will allow me to not take minimum distributions until after I separate from service. However, I have found nothing that speaks to continuing contributions beyond 70½. I would like to continue contributing if possible. What can you tell me about that? A. You may continue to contribute up to the usual limits until you separate from covered service.
Q. I’m trying to understand why the Thrift Savings Plan calculator that allows “monthly” or “lifetime” projections automatically defaults to the required minimum distribution amount at age 70½ when my (expected) withdrawals are more than the Internal Revenue Service RMD limit. Which takes precedence: the IRS RMD which produces a significantly smaller amount of TSP payout, or the amount I wish to take out? A. You must take at least the RMD amount each year to avoid a substantial penalty.
Q. I am 62 years old and still a federal employee (for the next several years). I am thinking of withdrawing $100,000 of the $250,000 I have invested in Thrift Savings Plan. The purpose behind this withdrawal is to save paying federal taxes on this amount. That is, we will be selling an investment property that has $100,000 in “unrealized tax losses” and we should be able to offset the taxes owed on the $100,000 TSP withdrawal with the $100,000 loss from the sale of the property. I am confused by a statement on the TSP website that says if…
Q. I am an active federal employee, over 70½ in age. Am I required to start my Thrift Savings Plan required minimum distribution withdrawals, even though I am not retired? A. No.
Q. If I leave the Thrift Savings Plan funds in TSP after I retire, I assume I am required to take required minimum distributions. Is this correct? If I leave the funds there and name trusts as beneficiaries, can a beneficiary then move the funds to an inherited stretch IRA after I die? A. Your TSP account is subject to RMD requirements once you reach age 70½ and are separated from federal employment. There is no simple, universal answer to your trust beneficiary question. It depends upon the trust, and you should consult an estate planning attorney before going down…
Q. I have tried to understand the issue of the 70½ age thing and what should be done with my Thrift Savings Plan. Do I need to roll it over, or can I keep it where it is and have the minimum withdrawal done each year? Also, can I withdraw $10,000 at that time? I did a one-time withdrawal in 2008. Does this mean I cannot make another withdrawal when I am 70½? A. You may leave your money in the TSP for life, but you must take Required Minimum Distributions each year if you are no longer working and have…
Q. My husband (retired FERS) turned 70 in March and has more than $200,000 in the Thrift Savings Plan. Our understanding is that he must begin withdrawal by April 2013. We owe $100,000 on our home. Is it better to take out enough to pay off the house or schedule the minimum monthly withdrawal? A. The smart move will depend upon your mortgage terms and how you manage the TSP money. If I were responsible for the outcome, I’d prefer to see you continue the mortgage, if it’s at a market fixed rate, and take the required minimum distribution from the TSP account.
Q. I attended a seminar given by MetLife Financial people about Roth TSP, IRAs, etc., and was told that even if I am working at 70½ and not retired that I still have to make a withdrawal of my TSP percentage. However, in the booklet “Withdrawing Your TSP Account” on Page 3 under withdrawal deadlines, it states in the second sentence: “If you are still a Federal employee employed at 70½, your required withdrawal must be by April 1 of the year following the year you separate.” I told the lady what our TSP booklet said, but she said it…
Q. I will turn 70½ years old on March 29, 2014. In what year do I have to take my first required minimum distribution? I have been told it would be on April 1, 2015, but I want to be 100 percent sure it isn’t April 1, 2014. A. It’s the year after the year in which you reach age 70½, so 2015.