TSP Withdrawal – Postpone Until New Rules Take Effect?

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I am FERS retired and turned 70 in March of this year (2018), meaning I need to make a mandatory withdrawal this year. I have previously taken a lump sum withdrawal. I am in a Catch-22 as to my best options while waiting for the new changes to take effect. Can I not choose and let TSP compute my RMD and make a decision after the new rules are in effect? Thanks Steve

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Asked on November 7, 2018 6:07 pm
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It’s too bad you took that partial withdrawal earlier. I, for one, would be leery about doing nothing and letting the TSP compute my RMD. What if they cashed me out because the RMD was considered to be my “full” withdrawal? The first thing I would do is call them and see what they say they would do. I’m sure that you’re not the only person in this quandary.
If their answer is not satisfactory, you could start substantially equal monthly payments of an amount that would ensure you took out an amount equal to your RMD by the end of March (April 1 is the deadline for your first RMD – all subsequent ones must be taken by December 31). Then, when the rules change (hopefully on October 1st) you could adjust your payments.
Another possibility is to elect “substantially equal monthly payments based on the IRS life expectancy table”, which should be enough to cover your RMD this year and in successive years. Once you’re on monthly payments, the TSP ensures that you’ve taken out enough to cover your RMD. You could follow this strategy longer if all you want to do is take RMDs, or you could change your payments when the rules change.

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Answered on November 7, 2018 9:41 pm
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I’ve tried in the past to call several times and only get a round-robin of ads; is their a new phone number or is there a best time to call? Thanks for your advise. Steve

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Posted by (Questions: 1, Answers: 1)
Answered on November 7, 2018 11:04 pm