Ask The Experts: Money Matters

By Mike Miles

TSP withdrawal at 70 1/2

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Q. I have to withdraw my Thrift Savings Plan because of my age (70½).

I am indecisive as to:

1. Withdraw all to a saving account

2. Get a partial withdrawal for 120 months, or

3. Withdraw part of it and gradually withdraw the rest over a 10-year time span.

My considerations are:

1. No taxes, as I understand it, over a period greater than 10 years on a gradual withdrawal

2. Putting me into a higher tax bracket.

What advice or comments can you give me?

A. Unless you can come up with a good reason – that is, using actual estimates of costs, taxes, etc., rather than just qualitative statements – I don’t know why you would take any more than the required minimum distribution each year.

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