RMD Help Please

General TSP Discussion.

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TLuke
Posts: 17
Joined: Tue Feb 13, 2018 8:33 am

RMD Help Please

Post by TLuke »

Please bear with me, I am not too sharp on TSP RMDs so I need your help. Is it wiser to calculate and take your full RMD in the first distribution year (the year I turn 70 1/2 - 2026) rather than delaying it until 1 April of the following year (2027)? As I think I understand it, if I delay until 1 April 2027 I will have two full RMDs in 2027 (1 April 2027 for the year I turned 70 1/2 (2026) and 31 December 2027 for the second distribution year (2027) along with the tax implications that go along with two full RMDs paid out in 2027. Appreciate your patience. Very much thanks. BTW - I’m in traditional TSP and not Roth TSP.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: RMD Help Please

Post by evilanne »

Yes
TSP will probably start sending you reminders about your RMD when you turn 70. They give you a 3 month grace period on your 1st RMD. If you don't withdraw that amount, Uncle Sam will tax you at 50% of the required distribution. As you already noted, you will have a double distribution in the 1st year if you delay until the grace period but you may want to double check with TSP when the time comes.

Looking at their payment calculator, it looks like they only calculate RMDs at age 71 in their program (see https://www.tsp.gov/PlanningTools/Calcu ... dentAge=23 ) but life expectancy payments prior to that are higher because they use a different table. You can change the numbers to fit your situation/assumptions in the link to estimate how much you would need to withdraw at age 70 (approximately the age 71 amount -- 12 X monthly payment -- you can always take out more so you meet or exceed the required minimum).

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