Federal required withdrawals

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Q. I am 69 years old and will be 70 in November. I haven’t received notice that I have to withdraw money — or how much for that matter — from my TSP. I am still working as a military civilian, and I don’t plan to retire anytime soon, as my TSP only has $54,000 — not enough to retire on. When I receive notice after my 70th birthday, will it be before the end of 2016 when I turn 70? Should I plan to begin the withdrawals before the end of 2016?

And with my Social Security, I am now in the 25 percent tax bracket with my social earnings, so I am getting hard on federal tax. My two incomes together are $42,000 as a civilian and $18,000 from Social Security (and my tax liability was $7,500 last year). Can I continue to save money in the TSP? I am deducting $170 biweekly. What is the wisest thing to do to continue to save for retirement if I ever get to and minimize the tax owed to the federal government?

A. As long as you are eligible to contribute to the TSP, whether you are contributing, or not, you will not be required to begin taking distributions. You won’t have to worry about this until you retire or otherwise separate from federal service.

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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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