Ask The Experts: Money Matters

By Mike Miles

RMD

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Q. I turn 70½ this year and want to start Required Minimum Distribution withdrawals from the Thrift Savings Plan based on life expectancy.

1. Starting withdrawals now will not equal the total RMD amount required for the year (since withdrawals are paid monthly). Will TSP issue a “catch-up” payment before Dec. 31 to fulfill the total RMD?

2. My TSP account is allocated among all five TSP funds (based on percentages advised by financial adviser). Will TSP apportion the RMD from all of those funds and keep my designated allocation percentages?

3. TSP told me it will not withhold taxes on my RMD distributions because they are not high enough (about $300 a month). I thought all RMD withdrawals would have taxes withheld.

A. You’ll find the answer to your questions at https://www.tsp.gov/PDF/formspubs/tsp-775.pdf. TSP will issue a “catch-up” check, but it might not be issued until the following year. The distributions will come proportionately from the funds in your account at the time of the distribution. The TSP will withhold taxes unless your annual distribution is expected to be less than $200.

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