planning on retiring

[MMARTI7]

I'm 72 years old, still actively working FT and plan to retire in about 4 months. My plan is to withdraw the TSP money and deposit it into my personal bank account in order to have access to it when I need it. I am not interested in investing it at this time. My question is should I wait until after retirement or should I withdraw now?

[rcozby]

Some things to consider:

1. You will pay income tax rates on whatever you withdraw. If the amount that you withdraw bumps you into the next higher tax bracket, then you just gave Uncle a gift you probably didn't mean to give.

2. Starting Sep 2019, you'll theoretically be able to keep your money in TSP AND withdraw it when you need it. The G fund pays pretty well these days compared to standard bank money markets, so staying in TSP may not be too bad going forward.

3. If you need some TSP funds prior to then, you can take a partial withdrawal or start monthly payments. You can then change your withdrawal amount to anything you like after Sep 2019.

4. If you're paranoid (like me), you'll want to withdraw as much as you can as soon as you can while the current tax rates and brackets are in effect. Withdraw to get to the top of your bracket every year and hope/vote to keep those in place as long as possible.

[MMARTI7]

I'm 72 years old, still actively working FT and plan to retire in about 4 months. My plan is to withdraw the TSP money and deposit it into my personal bank account in order to have access to it when I need it. I am not interested in investing it at this time. My question is should I wait until after retirement or should I withdraw now?

[evilanne]

MMART,

I think you really need a withdrawal strategy that considers many different factors--how much money is in your TSP, the amount of your Pension(s)/other income, your age, tax bracket (for traditional/not Roth) etc. Required Minimum Distributions kick in the year after you turn 70.5 or separate from service.
https://www.tsp.gov/PlanParticipation/B ... rmdbp.html
In response to your question, I would recommend that you wait until after your retire since you are currently getting a salary, you will be in a higher tax bracket this year than next. I would not recommend that you withdraw the entire amount. If you have a large balance, you may want to consider rolling it over into an IRA in a bank or a credit union if you don't want to invest it or you can leave it in TSP and take the RMDs annually or set a monthly amount above your RMD. A large withdrawal from TSP will definitely increase your tax liability.