TSP Withdrawal Deadlines to Avoid
You may know about the age threshold (70½ ) that the IRS imposes as a requirement to begin receiving mandatory Required Minimum Distributions (RMDs) which can potentially impact any other TSP withdrawal options you have in place. The RMD you must take is equivalent to a certain portion of your TSP Account Balance each year based on the IRS’s life expectancy table.
But did you know about the tsp withdrawal deadlines? The key date is April 1.
If you have already separated from federal service, the IRS requires you to make a withdrawal choice before April 1st (of the year following the year you become age 70½). Otherwise, the TSP will then on its own start providing RMDs by April 1 of the following year.
If you are still a federal employee at age 70½, the required withdrawal kicks in only by April 1 of the year following the year you separate from service.
How is Your TSP Account Balance Forfeited Without Meeting the TSP Withdrawal Deadlines?
If you are separated from federal service and do not begin withdrawing from your account by the required withdrawal deadline, the TSP can shift your account balance to the G Fund and impose a tsp withdrawal penalty on subsequent withdrawals.