Full withdrawal of TSP


Q. I will be 70½ years old in October 2017. I was planning to take a full withdrawal of my TSP account so I can set up trust funds for my grandchildren. I was told this was a bad idea, due to taxes in Virginia. What do you think?

A. The alternative is to leave your TSP in place, make the trusts the beneficiaries of the account and contribute the required minimum distributions to the trusts as they are taken. This will allow you (and your grandchildren) to reap the unique benefits of the TSP for as long as you survive. Ask your estate planning attorney and your tax accountant to figure out which will be best for you.


About Author

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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