Withdrawal strategy


Q. My husband has money in a retirement account that is not in the TSP. When we retire would we be able to just draw down his accounts and leave my TSP account alone? While his account is good, the TSP is, as you know, a great vehicle to save / invest money. His retirement accounts and mine our about the same: $450,000 in each. We are planning on retiring at 60 and delay collecting Social Security till 70 years of age. My husband is 58 and I am 57. While I know how to save, I’m not sure how to make smart withdrawal strategies. At 701/2 does the withdrawal rate take into account that this money needs to see two people thru their lifespan? Are there other liabilities from deplete one resource instead of take a little from all the pots? If I die first, he is the beneficiary and I understand he can leave the money there and take out payouts as he so chooses.

A. You may draw from either of your retirement accounts, within the rules governing each, as you choose. The Required Minimum Distributions take only two factors into account: 1. The affected account’s balance at the close of the previous calendar year, and 2. the life expectancy of the account owner. Which account or accounts you draw from each year will depend upon your particular circumstances and your strategy for managing your resources. While there is no one-size-fits-all way to fund your spending in retirement, I generally recommend that you leave your TSP untapped for as long as possible.


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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