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.
Browsing: Required Minimum Distribution
Q. I’m a FERS retiree, age 64, with a $36,000 annual pension. My spouse has a $40,000 annual salary. We have a rental property that brings us $24,000 a year. And we have a home mortgage balance of $500,000. Our living expenses so far do not require me to withdraw my $600,000 Thrift Savings Plan fund. I plan to live until age 85. As I approach age 70½ with minimum distribution, what is the best tax strategy for transferring the $600,000 from the TSP into a private investment account? A lump-sum rollover into a Roth account after paying the taxes? A calculated…
Q. I have an IRA that guarantees me a 4.50 percent interest rate. I can roll over IRAs anytime. Very little fees if any. It is a variable annuity that I purchased in 1983 that has granted me the fixed income. I am thinking of rolling over my Thrift Savings Plan and only taking the required minimum distribution at the end of each year. I can take out money without any penalty except for taxes. There is also a good death benefit. There are no surrender fees. What are your thoughts? I am already 75 years old. A. The phrases…
Q. My mom, who doesn’t know English, turned 70½ on Aug. 4, 2011. She has IRAs at two different places: Vanguard and Bank of America. My mom has already satisfied her 2011 Vanguard required minimum distribution before April 1, 2012, because it was her first RMD. The Vanguard 2011 RMD was calculated by Vanguard and mailed to my mom, by the way. Was she also required to take a Bank of America RMD? If so, oh no! What’s the best way to proceed? A. In general, an RMD must be calculated for each IRA, and the total RMD for all…
Q. I retired as a CSRS employee after 31 years of service. I will be 70½ in June and, as I understand, I will have to begin taking out from my Thrift Savings Plan account then. If I am reading the information correctly, I have until April 2013 to do this. If so, when is the deadline for me to send in my request for withdrawals? Also, I have checked the TSP forms on the website but could not determine the appropriate one to use. I am planning to take out my TSP savings in monthly withdrawals. A. Your first required…
Q. Just how is the minimum distribution calculated for the TSP? I understand calculations based on life expectancy tables, but not how the minimum amount is calculated. I am assuming that it would be less than that based on life expectancy. I am FERS and plan to retire in June. A. In general, the Required Minimum Distribution amount is calculated by dividing the prior year’s ending account value by the appropriate life expectancy factor. There are specific rules that may apply to certain situations, however. See IRS Publication 590 for instructions for calculating the RMD.
Q. If I am still working full time for the Veterans Affairs Department at 70½, do I have to take a minimum distribution from my TSP account? A. You don’t have to begin distributions from your TSP until you stop working for the government.
Q. Is the term TSP Life Annuity synonymous with a Met Life Annuity? If I choose IV. Withdrawal Elections Monthly Payments is that subject to required minimum distribution? What happens to any money in the account when I die? They don’t ask for beneficiary information. A. As far as I’m concerned, TSP Life Annuity and MetLife Annuity are the same thing. You may elect fixed monthly payment or have the TSP compute your payments. In either case, you’ll be subject to the required minimum distribution rules, which require that a certain amount be withdrawn from your account each year, once…
Q. I reached my 70th birthday in November. When must I start taking payments from my account? A. If you are separated from federal service, you must take your first required minimum distribution by April 1, 2013. If you’re still a federal employee, you can wait until after you leave service.
Q. I reached age 70½ in 2011, therefore must make my initial required minimum distribution from my Thrift Savings Plan account before April 1. Which table should I use to determine my RMD? My spouse is my only beneficiary and is more than 10 years younger than me; so, it seemed to me that the appropriate table is the Joint and Last Survivor Table. However, two different TSP customer service representatives have informed me that I must use the Uniform Lifetime Table, and that only those who have established annuities within their accounts (which I have not done) are permitted…