2023 TSP participant insights

[tsptalk]

2023 TSP participant insights

2023 TSP participant insights

 

[evilanne]

I wonder how they come with their stats...
Ava has never been much help IMO...I think the most helpful advice was to actually call them.

Their calculators are horrible, I stopped Life Expectancy (I have to wait 30 day before starting fixed payments since I did a partial rollover) But they have a link for modeling payments. The fixed dollar option gives


[TABLE="class: al-table ng-star-inserted, width: 424"]
[TR]
[TD]First Installment Date
[/TD]
[TD="class: al-text-align-right al-nowrap, align: right"]Feb 15, 2024
[/TD]
[/TR]
[TR]
[TD]Estimated Duration
[/TD]
[TD="class: al-text-align-right, align: right"]10 years or more
[/TD]
[/TR]
[/TABLE]
The Life Expectancy option will calculate your payment based on monthly, quarterly or annual payments and give you a duration in years & months based on your current balance but I can't tell if they are included any estimated RoR or if they are factoring in RMDs. After playing with my balance and the actual LE factors, my account balance shouldn't fall below $1000 until I'm 114 assuming no earnings--way more than 27 years, 1 month. So I took my balance, divided by the 1st month estimated payment to get a number of months and then divided by 12 to get 27.1 years. Not exactly what I would consider "modeling" anything but that is where they are coming up with their estimates and there is no consideration for RMDs or RoR that should be included in any real modeling. They really have dumbed it down from what we had before.

 

[evilanne]

I guess I have to give them credit on mailing out the check, I submitted my rollover request last weekend and it actually arrived today!

 

[Scout333]

What is your experience with the RMD process for those who have reached the required RMD distribution age? i.e. Are the checks for the RMD amounts being sent out as promised? Are credits being given for withdrawals already taken out? Including monthly withdrawals?

I will be reaching the RMD required age this year and would like to know what to expect?
Thanks Fellow TSP'rs!

 

[evilanne]

Scout, I'm not there yet but my understanding is that if you take out the RMD or more during the year, you are good and they won't send you anything. If your distributions are less than the RMD, they will automatically send you the remaining amount at the end of the year.

 

[nasa1974]

I turn 73 next year. I'm going to transfer everything from TSP to my Edward Jones account so I don't have to deal with 2 accounts and TSP in particular.

 

[JKtt8]

I turn 73 next year. I'm going to transfer everything from TSP to my Edward Jones account so I don't have to deal with 2 accounts and TSP in particular.

Smart move! A brokerage account offers many more investment options than the limited TSP index funds - individual stocks and sector funds can be much more rewarding.

 

[Scout333]

I turn 73 next year. I'm going to transfer everything from TSP to my Edward Jones account so I don't have to deal with 2 accounts and TSP in particular.

Sounds good from the investment side . Assuming you are thinking of a rollover to an IRA with your brokerage? Otherwise you would get a hard hit on the tax side if you receive it all in one year? Wouldn't you still have to take the RMD each year? Just have been mulling over these same questions.

 

[nasa1974]

Sounds good from the investment side . Assuming you are thinking of a rollover to an IRA with your brokerage? Otherwise you would get a hard hit on the tax side if you receive it all in one year? Wouldn't you still have to take the RMD each year? Just have been mulling over these same questions.

My TSP would rollover to a similar IRA account. No tax hit. Yes, in 2025 I will have to take the RMD (unless they change the age again), but I will only have to take it from Edward Jones not both. It will be much easier working with my agent down the street than some AI TSP has tossed out there.

 

[evilanne]

My TSP would rollover to a similar IRA account. No tax hit. Yes, in 2025 I will have to take the RMD (unless they change the age again), but I will only have to take it from Edward Jones not both. It will be much easier working with my agent down the street than some AI TSP has tossed out there.

They are increasing the age but not until 2033. It sounded like you wanted to roll over everything to EJ in another post but If you leave anything in TSP, I think TSP will automatically send RMD at end of year

I did get my Roll Over Check last Saturday, so it took less than week!

 

[Scout333]

EA, do they withhold taxes if you get a check or do you still have the option to roll over to another IRA to avoid the withholding?

 

[nasa1974]

They are increasing the age but not until 2033. It sounded like you wanted to roll over everything to EJ in another post but If you leave anything in TSP, I think TSP will automatically send RMD at end of year

I did get my Roll Over Check last Saturday, so it took less than week!

My understanding is the new RMD age is 73. I'm 72 this year so will move all of my TSP to Edward Jones this year. I was going to do it last year when I thought the age was 72. I don't want to deal with two accounts, and it is easier to talk to my financial advisor who is 10 minutes from my house vs. someone from TSP over the phone. Thanks for the post EA.

 

[evilanne]

EA, do they withhold taxes if you get a check or do you still have the option to roll over to another IRA to avoid the withholding?

For a rollover they do not withhold any taxes but they ask for the institution and account number where you will be depositing it. The check is written to the Institution FBO: TSP Account Holder. Originally I was going to send it directly to brokerage but you have to wait 7 day after entering a new address before they will send anything.so I just sent it to my home address on file. Had to sign form for the Institution and forwarded that with the check to them.

 

[Scout333]

Thanks for the information EA!