Secure 2.0 Changes to RMD

[evilanne]

https://federalnewsnetwork.com/tsp/2023 ... ming-soon/

Other provisions of SECURE 2.0 have already taken effect. At the beginning of 2023, the starting age for RMDs increased from 72 to 73. Beginning in 2033, the starting age will increase even further — to 75.

The provision increasing the RMD age affects anyone born on or after Jan. 1, 1950. It doesn’t impact anyone born before 1950 — that group had to start taking distributions in April 2023. And the penalty for not taking the RMD on time also decreased this year — from 50% to 25%

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[12squared]

Also, beginning in 2024 "Roth balances in the TSP will no longer be subject to RMDs prior to a TSP participant’s death"

The next needed change is to permit withdrawals from G fund alone to satisfy the RMD instead of across all funds equally.

[jimcasada]

I retired earlier this year, but haven't touched my TSP yet. My plan was to start rolling over some funds to my regular Ameritrade IRA, and then start taking withdrawals as needed from there, starting 2024. I know that I can take withdrawals real quick & easy from my IRA, as compared TSP (and aways have the option to return funds within 60 days). Now, you got me thinking that maybe I should open a Roth IRA to do something similar?

[evilanne]

Jim,
Actually, it isn't really hard to get lumpsum payment now from TSP, I had changed my fixed payment and then subsequently requested 2 lump sum payments...the last one I got in one day.

Rollovers take longer and the address has to be be on file one week in advance. I had them send the check to me in name of brokerage and the overnighted it to brokerage in prepaid FedEx rather than wait a week. Still worked the same as institution to institution transfer.

You have to have earned income (W-2 or Schedule C/Self Employment) to contribute to Roth, but you can do conversions and pay the taxes. There are also 5 year rules applicable to Roth that you should be aware of if you have all your retirement funds in traditional accounts.
TSP used to have a great calculator that combined SEPP/Life Expectancy and RMDs but there new tools are worthless. I end up using a spreadsheet & the IRS factors to calculate but this RMD calculator gives you a pretty good idea of what your RMD payments will be if you don't start taking withdrawals. https://www.calculator.net/rmd-calculat ... #calresult. I was going to pull back on withdrawals from TSP this year but this convinced me that I need to take out at least the Life Expectancy amount. If you don't need the money, you can invest in regular brokerage or convert to Roth