New Guy

[claytonr1]

Hello from Northern Virginia. I'm 56 and I retired my first day eligible in 2015 (fortunate to have CSRS) and contributed to TSP during my career (4 yrs. Navy & 32 civilian). Hers's my status:

-TSP Balance: $450,000 (All invested in the L2020). As you can tell, not a big gambler and want much less risk since retired.
-No debts other than large mortgage & plan to eventually relocate to less costly area. Still not sure where to go, but prefer around Richmond, Va., or North Carolina.
- Monthly net retirement covers all living expenses.
-NOT going back to work - Life MUCH better without all the stress, office politics and commuting! Lost 40 pounds since retirement.

Interested in thoughts of folks regarding TSP withdrawal strategies. Should I begin taking monthly payments now ($900 or so), or let 100% stay invested and begin withdrawal in 4 or 5 years? Want to enjoy some of the funds while we are still young and healthy. Hopefully, the new TSP Modernization bill will pass & provide us many more options for withdrawal in the near future. Great site and learning much from the members!

[CrocSix]

Just wanted to say welcome. I'll leave the advice to the more experienced members here.

[evilanne]

claytonr1

Welcome to the forum. It really depends on your specific situation and your long term goals when deciding on a withdrawal strategy.

Since you are 56 and retired in 2015, were you 55 in the year you actually retired? This determines whether or not you can withdraw without 10% penalty before 59.5. If you turned 55 the year after you retired, you can make withdrawals but your options are more limited.
see viewtopic.php?f=21&t=13649&p=55556&#p55556 which has links to relevant IRS publications.

Are all contributions traditional or did you have any Roth contributions? All tax deferred withdrawals are taxed as ordinary income. Roth distributions are tax free and can be spent or transferred to Roth IRA

You can play with the income retirement calculator with different scenarios. Based on info you stated you could actually withdraw about $1300/month and when RMDs kick you would have to withdraw more. see https://www.tsp.gov/PlanningTools/Calcu ... dentAge=56 (Assuming on 4.5% RoR, spouse same age, starting now--you can modify as needed)

You may want to look at some of the seasonal strategies to see if you may want to work on increasing your RoR. Another option would be to shift to 2030 or 2040. As we approach 2020, the fund's return will approach 2020 Income fund and result in lower RoR as much is invested in the G Fund.

Good Luck

[claytonr1]

Thanks evilanne Great tips. Yes, retired at 55, so no penalty. All funds are traditional TSP. Like the idea of considering 2030 or 2040. Appreciate you thoughts on strategy. I've spent so many years accumulating, it's a different mindset to start taking $$ out of the account. Thank you!

[evilanne]

Your are welcome. I know the feeling...still trying to transition from saving to spending. It gets more complicated when you factor in tax impacts. One thing I learned from a retirement forum is that you need to be careful 1-2 years prior to Medicare (age 65) since Part B premiums are based on your MAGI which shouldn't be an issue unless you make large distribution in the tax year that they use to determine your rate, see https://www.medicare.gov/your-medicare- ... costs.html.

[crondanet5]

You are now in the critical window for health issues. Push your general physician for blood work. Eliminate white sugar and grains and night shade vegetables. And start taking your TSP Withdrawals. If you don't need the withdrawal money put it in a brokerage account and buy index funds or Amazon or Apple stock with it. Make it a joint account with right of survivorship. This will help your heirs lessen their tax as they liquidate your account. Have you consulted a quality lawyer about setting up a Living Trust? Do you have a Designated Health Care Advocate? Limited Power of Attorney? As for working, why not work somewhere for 10 years and get Social Security? Assuming DT et ux do not replace Romneycare with what appears to be a terrible plan you will be signing up for Medicare at age 65. If you do not sign up any medical insurance goes tilt. The easiest thing is to have Medicare premiums taken from your Social Security monthly Benefit payment. And another stream of retirement income is always helpful. Why are you in the L2020?

[mmmmmbeer]

Welcome sir!