Q. I am planning to retire at 65½ years of age. Can I withdraw monthly a certain amount between 65½ and 69½ and change to the life expectancy option at 70? A. This is not allowed, but if you reduce your fixed monthly withdrawal to an amount that does not meet your required minimum distribution for the year, the Thrift Savings Plan will issue a payment to make up the difference and ensure that your RMD for the year is met.
Browsing: Required Minimum Distribution
Q. I am 70 years old and still employed by the federal government. When I am 70½, I understand I must take a required minimum distribution from my traditional IRA/401s, but not clear if this applies to my Thrift Savings Plan account. Can you please tell me what the rules are for those who are 70 and over but still working for the government insofar as taking a required distribution from my TSP account? Can I wait until I retire from government? A. You may wait until you retire. You may also be able to transfer your IRA/401k balances into the TSP…
Q. My husband is retired for seven years now and is 67 years old. So far, we haven’t needed to use this money. We are trying to keep our income below $70,000 per year to stay eligible for our state property tax freeze, which is a significant saving of $2,000 or more per year. 1. What percentage or dollar amount are we required to take out each year? 2. Did I read correctly on someone’s question that if we set up a 10-year timetable we do NOT have to pay taxes on that money? A. The required minimum distribution changes each year based…
Q. Can I withdraw money from my IRA in December and have it applied to my 2014 required minimum distribution? A. No.
Q. If I have Thrift Savings Plan funds in both G and C funds when I am required to begin taking required minimum distributions at age 70½, can I specify which funds the RMD are taken from? (My concern is that the C Fund may be at a low due to market conditions, and withdrawals may be better to defer till the market improves.) A. TSP distributions are always taken proportionately from your various holdings at the time. I don’t see the rationale for your concern, though. Your account will be allocated exactly as it was before the withdrawal. If…
Q. I turned 70 years old in July and have been a CSRS retiree since 1997. I started the required minimum distributions in September 2012 from the Thrift Savings Plan and an IRA with DWS Scudder. Monies were invested in the G Fund with TSP and the DWS GNMA S Fund, which are very low risk. Before retirement, I felt more comfortable taking risk. I started withdrawing RMD only because I had to avoid penalty. My main concern at this stage in my life is to face as little risk as possible and to at least maintain my balance with minimum losses. My IRA…
Q. I had the same concerns as the person who you answered Aug. 8. He is trying to follow a bucket strategy and not sell off equities in a down market. I think there is a way to do this in the Thrift Savings Plan, but it is more complicated than I like. Suppose you have $400,000 invested equally in G, C, S and I. Assume your required minimum distribution is $12,000 or $1,000/month and it is paid on the first of each month. On the last day of the month, before 1200 Eastern time, transfer $300,000 to the G Fund. Money transfers…
Q. I am a FERS retiree who is below the age of RMD. I’ve often heard that a good way to invest TSP dollars is to choose the L Fund that corresponds with one’s life expectancy. My health and life outlook and family health history are pretty excellent. My personal assessment of my life expectancy is about 99 years. This would have me using the L 2050 fund. Is this foolishness? Should the L fund selected be strictly the actuarial or TSP-calculated life expectancy, rather than one’s own assessment of same? A. I think that, as long as your own…
Q. I have a Thrift Savings Plan account as a CSRS retiree. I also turned 70½ this year and have non-Roth IRAs. Can I take a distribution from one of the IRAs that will satisfy the required minimum distribution calculation for my TSP account and all non-Roth IRAs? If so, would I still have to take a distribution from my TSP account just because I turned 70½? A. According to the Internal Revenue Service rules, you should be able to satisfy your entire RMD requirement using one or more withdrawals from any covered account or accounts. The TSP will automatically distribute its…
Q. I turn 70½ this year and want to start Required Minimum Distribution withdrawals from the Thrift Savings Plan based on life expectancy. 1. Starting withdrawals now will not equal the total RMD amount required for the year (since withdrawals are paid monthly). Will TSP issue a “catch-up” payment before Dec. 31 to fulfill the total RMD? 2. My TSP account is allocated among all five TSP funds (based on percentages advised by financial adviser). Will TSP apportion the RMD from all of those funds and keep my designated allocation percentages? 3. TSP told me it will not withhold taxes on my RMD…