By Mike Miles
January 9th, 2013 | Uncategorized
Q. I have tried to understand the issue of the 70½ age thing and what should be done with my Thrift Savings Plan. Do I need to roll it over, or can I keep it where it is and have the minimum withdrawal done each year? Also, can I withdraw $10,000 at that time? I did a one-time withdrawal in 2008. Does this mean I cannot make another withdrawal when I am 70½?
A. You may leave your money in the TSP for life, but you must take Required Minimum Distributions each year if you are no longer working and have reached age 70½ to avoid an Internal Revenue Service penalty. Automatic monthly withdrawals from your TSP account, based on your life expectancy, will satisfy the IRS RMD requirement. You can begin these distributions using Form TSP-70. You may not take an additional lump-sum partial withdrawal from your TSP account, but you may set the monthly payments for a fixed amount that is higher than the RMD amount and then change the amount of the fixed monthly payments once each year in January.