Hi, I recently attended World Investor Week 2018 put on by SEC and TSP. The attached pdf is the presentation given that describes TSP retirement withdrawal options and the options that will be available beginning in Fall 2019 as a result of legislation signed by Pres. Trump in Fall of 2017. This pdf has very good information on the new multiple withdrawal options that will be available. My understanding is that even those who have retired will also have these new options. They did get rid of the single lump sum and now can do many multiple things.
..sorry... must be too big.. will look for a link
ok here is link so you can see the Webinar presentation.... but quite honestly the PDF is better! :)
https://www.sec.gov/news/upcoming-ev...p-account-2018
PDF LINK: (This link to PDF is also embedded in the Webinar meeting URL above).
https://www.sec.gov/investor/your-ts...018-slides.pdf
HERE ARE MY PERSONAL NOTES (so you would want to confirm accuracy). I took them pretty quickly while listening to the Webinar presentation. I think it is BEST to read the pdf first and then if you want watch the webinar.
3 Forms will be consolidated to TSP-99 by late next year.
Under new rules, allows more Withdrawal (WD) options. Let’s you change your monthly payment options each year and will also allow quarterly and yearly WDs. Can do more than just one lump sum withdrawal.
11/17/2017 - NEW law enacted and must be implemented by TSP within 2-years—so that is Nov 2019. Provides more flexibility in withdrawing (WD) your funds.
Includes multiple age-based WDs for those 59-1/2 while in-service (i.e. still working). This will not stop you from being able to take a partial WD after you retire as is now the case, plus you get up to 4 Age-based WDs per year while in service (still working). All or any portion can be transferred to an IRA or eligible employer plan, if eligible and can continue to make contributions to the TSP.
Once retired, will be able to take one partial lump sum every 30 days, no lifetime limit, and can do this while receiving installment payments. All or a portion can be transferred to an IRA or eligible employer plan, if eligible.
New ability to select payments on quarterly and yearly basis (plus the monthly as is currently the case). Option to get a combination of (1) partial lump sum payout, (2) purchase an annuity and/or (3) get full lump sum while receiving installment payments – but not required to take everything out. New: option to start, stop or change installment payments at any time. Also, for Lump sum or Life Annuity, can use all or a portion of the account balance. So, can do all 3: do a lump sum (partial or full) and if you do a partial lump sum, you can also set up an annuity if you want plus some payout as installments that can be changed at any time.
FULL WD at retirement will NO LONGER BE REQUIRED. Currently, you must divide it up between single payment (full or partial lump sum), life annuity or monthly payments (of fixed amount or life expectancy). But under new law, you are no longer required to fully withdraw your TSP. You can elect installments and lump sum (full/partial) and Life annuity if you want, in basically any combination.
WD tax treatment. You will be able to select to WD from Roth balance only, traditional balance only, or mix. Under current law, the tax charge is pro-rata against your TSP balance traditional and Roth. Under new law, will be able to apply tax to traditional only, or Roth only or pro-rata from both.
New law gets rid of full WD requirement at age 70.5 when person is separated from gov. IRS Required Minimum Distribution (RMD) requirement at age 70.5 is going away. They will send you the RMD amount automatically. The RMD rules apply to each separate account and they use uniform lifetime table as long as there is money in the account. When you turn 70.5 must satisfy by April of year 2. May begin at 27.4 or 26.5%.
Early WD penalties – Exceptions to IRS Early Penalty - must be age 59.5, or 55 and retired, or 50 public safety employee.
TSP 775 AND 536 to help with payments from your account and RMD rules as far as taxes.
Go to TSP.gov - Many tools. Use calculators. Can now find your beneficiary information on line now.
