Thread: Your TSP account when you die

My wife and I discussed this shortly after I retired. I took it upon myself to assemble some steps she should take in the event of my death that helps her out since TSP can be a little daunting for non-participants. During the processing of my retirement paperwork in 2013 I spoke with my retirement counselor, and with a TSP representative specifically regarding designation of a TSP beneficiary. They both told me the same thing as the website. Distribution of TSP funds to beneficiaries are automatic in the order stipulated on the website under your account. No further action was needed on my part unless I wanted to specific another order of distribution. I've also made arrangements for my financial adviser to assist her with moving it out of TSP to an IRA account in her name, or my son's name if she is deceased, in the event of my death and once TSP has established the Beneficiary participant account. She'll simply initiate a one-time withdrawal (IRA transfer) to an outside account. That, to me, is a much simpler, more manageable option for them. Your situation may be different, and you may want to leave the funds in TSP. That's just not my preference.
I also put together a document with TSP account information, account number, and password, and specific forms she may need to complete, and detailed information, along with contact persons for each of my other investment accounts. I did the same for my son.
I update it as any information changes. If you're retired, be sure to include login (claim number) and password information so they can access your Services Online account. The more information the better.

I submitted a TSP-3 many years ago... designated a portion, 25%, goes to my sister and the rest to my wife, which she whole heartedly supports. I should put together information for them on how to handle/submit forms to TSP in the unlikely event of an early demise.

There is an interesting article written by the Wall Street Journal Editorial Board about the new Secure Act that passed through the House of Rep this summer. The Secure Act updates the nation's retirement rules. So far the bill has advantages such as eliminating the contribution age limit, allowing distributions to be delayed until 72 instead of 70.5 years, and allowing $5000 early withdrawal when a child is born or adopted.

The articles main objective is to point to the 'hangup' of the new bill. To pay for the new proposed leniencies without raising taxes, retirement assets passed down to children, grandchildren, and other non-spousal heirs would be required to emptied from requirement accounts within 10 years.

This would speed up the tax liability, which could also push the bunched-up distributions into a higher tax bracket.

This may be something to look into for those who have really summed up a good amount of savings sitting in retirement accounts that they plan to pass down.

https://www.wsj.com/articles/iras-in...ts-11563318661

Originally Posted by TommyIV

There is an interesting article written by the Wall Street Journal Editorial Board about the new Secure Act that passed through the House of Rep this summer. The Secure Act updates the nation's retirement rules. So far the bill has advantages such as eliminating the contribution age limit, allowing distributions to be delayed until 72 instead of 70.5 years, and allowing $5000 early withdrawal when a child is born or adopted.

The articles main objective is to point to the 'hangup' of the new bill. To pay for the new proposed leniencies without raising taxes, retirement assets passed down to children, grandchildren, and other non-spousal heirs would be required to emptied from requirement accounts within 10 years.



This may be something to look into for those who have really summed up a good amount of savings sitting in retirement accounts that they plan to pass down.

https://www.wsj.com/articles/iras-in...ts-11563318661

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