Thread: TSP - 72(t) - what form?

Steve, here are some articles on 72t IRS SEPP:

Accessing Your TSP Account After Retirement : FedSmith.com

http://www.irs.gov/Retirement-Plans/...iodic-Payments

Check out 72t.net

Hope this helps you. Also if you log in to your tsp account and send private message to TSP. Response time is 24 hours, or you can call TSP for more accurate information.

Maybe some retired TSPtalkers will read your post and tell you which form to complete also there is an old thread on 72t in this site.

You fill out the form requesting full withdrawal with monthly payments. You have to do the 72t calculations yourself and request the amount you want. You have the option each year to change monthly amount. Tsp will notify you each year that you can do that. You'll break the 72t rules if you adjust before 5 years or age 59.5 and owe all back penalties. With the really low rates you may want to do the minimum distribution that tsp offers. Then you get to make a one time change I believe. I'm taking 72t withdrawals now if you have any more questions.

Originally Posted by clester

You fill out the form requesting full withdrawal with monthly payments. You have to do the 72t calculations yourself and request the amount you want. You have the option each year to change monthly amount. Tsp will notify you each year that you can do that. You'll break the 72t rules if you adjust before 5 years or age 59.5 and owe all back penalties. With the really low rates you may want to do the minimum distribution that tsp offers. Then you get to make a one time change I believe. I'm taking 72t withdrawals now if you have any more questions.

Does this differ from the "life expectancy" formula? Do I need to do those calculations too and is this the same form? I'll bet you folks in retirement really get tired of these repeat questions? Huh?

Frank

Originally Posted by Lakebound

Does this differ from the "life expectancy" formula? Do I need to do those calculations too and is this the same form? I'll bet you folks in retirement really get tired of these repeat questions? Huh?

Frank

Glad to help. If you tell tsp to give you payments based on life expectancy (this is the only option to avoid penalties unless you meet some other exemptions like being 59.5) it is the same as 72t minimum distribution method and tsp will do all the work for you. The way it's calculated you should get an increase each year but starts out lower than other methods. It s same form I think. It's considered a full withdrawal but you have one chance to change it I believe. So at 59.5 you could go to monthly payments of your choosing or full lump sum.

Originally Posted by clester

Glad to help. If you tell tsp to give you payments based on life expectancy (this is the only option to avoid penalties unless you meet some other exemptions like being 59.5) it is the same as 72t minimum distribution method and tsp will do all the work for you. The way it's calculated you should get an increase each year but starts out lower than other methods. It s same form I think. It's considered a full withdrawal but you have one chance to change it I believe. So at 59.5 you could go to monthly payments of your choosing or full lump sum.

Clester, you are such a wealth of information for us, future retirees.

Originally Posted by clester

Glad to help. If you tell tsp to give you payments based on life expectancy (this is the only option to avoid penalties unless you meet some other exemptions like being 59.5) it is the same as 72t minimum distribution method and tsp will do all the work for you. The way it's calculated you should get an increase each year but starts out lower than other methods. It s same form I think. It's considered a full withdrawal but you have one chance to change it I believe. So at 59.5 you could go to monthly payments of your choosing or full lump sum.

Thank you!

Originally Posted by Maricar19

Clester, you are such a wealth of information for us, future retirees.

I concur. And I appreciate all the advice and help offered here.

Frank

Careful with distributions (ie monthly withdrawals under 72t). Once started the rules require withdrawals for 5 years or until 59.5, whichever is later. I rolled my TSP into an IRA and I am receiving payments under the annuitized method.
Couple good links.

http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments

72t.net

When I retired I wa able to use 3.5% as my withdrawal rate so the amortization method gave me the most money. But rates are so low now. It's basically 120% of G fund rate. I used 72t.netfor all my planning. Good calculators and message board

Originally Posted by Lakebound

Thank you!



I concur. And I appreciate all the advice and help offered here.

Frank

Frank - April 2016 is my exact 30 years., but I intend to stay until the end of 2016 unless...

Originally Posted by Maricar19

Frank - April 2016 is my exact 30 years., but I intend to stay until the end of 2016 unless...

I will have 32 years between the Navy and this current position. I bought back my 10 years Military of course. My recent promotion to Management would normally dictate that one would want to work the last three for a high three scenario at that new rate. For me that would mean staying until March of 2017 and I'm not willing to do that.

I work in a higher stress vocation IMO and adding to that, a Management position I have decided that the extra $80.00 per month for an additional 11 months is just not worth it.

I'm leaving when I can. My life has been good and it will only get better and if I need to work part time for pocket money and to stay busy, I plan to do that. In my line of work, it has always been the ones who didn't stay busy that get buried 10-12 years after retirement.

I'm not going out like that. My wife and I have both worked too hard not to enjoy our lives together while we are still young and active. I started this at the age of 18 and I have never been able to wear anything but a uniform my whole life. I want something else and I know it is time. Some people's "time" is later, some not.

Frank

Originally Posted by clester

You fill out the form requesting full withdrawal with monthly payments. You have to do the 72t calculations yourself and request the amount you want. You have the option each year to change monthly amount. Tsp will notify you each year that you can do that. You'll break the 72t rules if you adjust before 5 years or age 59.5 and owe all back penalties. With the really low rates you may want to do the minimum distribution that tsp offers. Then you get to make a one time change I believe. I'm taking 72t withdrawals now if you have any more questions.

Chester,

Thank you for the info. I understand about not changing the distribution for 5 years or age 59.5 (which ever comes last), but how about after meeting the 72t time/age requirements? Can you elect to stop taking withdraws, say until you are required to take RMD at 70.5? Or start taking a much larger distribution - say if you know you have some big expenses coming up and need the money for a particular year?

I assume that these TSP distributions will not affect your eligibility for the FERS Special Retirement Supplement (SRS).

Thanks for all the info!

-steve