Mandatory withdrawals from TSP at retirement


Q. Currently, I am 79. I had planned on retiring on April 30, 2011. My boss has asked me to extend another year because of the inability to replace my talent. If I retire on April 30, 2012, I will have a total of 33 years service. I am a FERS employee. Needless to say, since I have always contributed the max I am allowed under the IRS rules, the amount deposited has become fairly large.
My question is simple: “What amount of money or percentage thereof will I be required to withdraw from my TSP account each year? Will it be based upon my life expectancy? Am I required to take an annuity account with MetLife or may I leave the funds in the TSP? Is there a penalty if I do not take an annuity account? My reason for asking is my wife is 22½ years younger than I and I had hoped to leave the major balance of the account to her after I pass.

A. Your required minimum distributions will be based upon your life expectancy and your account balance each year. You are not required to purchase an annuity with your balance and may leave your funds in the TSP. I suggest that you spend some time at to, at least, familiarize yourself with the basic rules and options related to withdrawing your money after you separate.


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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 and view his blog at

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