TSP required minimum distributions


Q. I retired in 2018, on Dec. 31, off the books with a buy out. I am 73 and have already been taking the required minimum distributions from a couple of other IRAs. I know I will be required to set up distributions or something with the TSP in and for 2019. Because I retired in 2018 and because I am 73, do I need to take a TSP distribution for the 2018 year before a point in April? And if yes, will that need to be reported as income for 2018 or income for 2019?

A. The rule says that you must take an RMD for the year in which you are first both: 1. Separated from service and; 2. Age 70½ or older. So the answer for you will depend upon when the record states that you were separated from FERS covered service. If it wasn’t until the end of the day, Dec. 31, then I would argue that your first RMD year is 2019. If you were separated any time before the end of the last second 2018, then 2018 will be your first RMD year.

I’m not the one who will sign your tax return and defend it in the case of an audit, however, and the final decision should be up to that person. If you’re not sure, you should hire a CPA to prepare your 2018 return, answer your question, and to argue your position if you are audited.


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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