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Leaving funds in TSP and taking 72t withdrawals
- Thread starter clester
- Start date
mayday
Active member
Disability withdrawal plan. I'm told I won't encounter any problems.
mayday
Active member
My options are open. All depends on not paying uncle sam any more than he is due. I haven't started the withdraw yet. I'll post when my tax adviser gives me more info.
clester
Well-known member
So Mayday, How goes everything with retirement? Taking 72t withdrawals yet?
I have decided to retire may 31. I found info about using the 72t amoritization method. It seems you can do a recalculation each year. So the amount doesn't have to be static for such a long time. At www.72t.net they have posted several PLR's (Private letter rulings) where the IRS approves of a plan that does this.
I won't start mine until next Jan. for tax purposes. I have a large leave payout coming. Can't wait to retire. 122 days to go!
I have decided to retire may 31. I found info about using the 72t amoritization method. It seems you can do a recalculation each year. So the amount doesn't have to be static for such a long time. At www.72t.net they have posted several PLR's (Private letter rulings) where the IRS approves of a plan that does this.
I won't start mine until next Jan. for tax purposes. I have a large leave payout coming. Can't wait to retire. 122 days to go!
Texarkandy
Member
C'mon in - the water's fine!
nnuut
Moderator | TSP Legend
radarvectors
New member
Leaving funds in TSP, retire like clester....??
clester, I have been following your thread with Gary, man what a great discussion! I am ATC, eligible in Sept to go, I turn 50 then also. I was in your camp all-along......except....how are you doing this at age 49...or Mayday at 51....?? What exemtption rule are you using? I have been told by the financial advisors briefing our group at Seattle ZSE you had to wait till the year you turn 55....and can't actualy start taking the SEPP until your 55th birthday....all the rest about changing at 59 1/2...I agree with....but age 49 and 51 guys...how?:worried: Reason I'm asking is cuz of course I want to know how to do this....I had my age 55 plan till I read this, please explain which exception you are using...
clester, I have been following your thread with Gary, man what a great discussion! I am ATC, eligible in Sept to go, I turn 50 then also. I was in your camp all-along......except....how are you doing this at age 49...or Mayday at 51....?? What exemtption rule are you using? I have been told by the financial advisors briefing our group at Seattle ZSE you had to wait till the year you turn 55....and can't actualy start taking the SEPP until your 55th birthday....all the rest about changing at 59 1/2...I agree with....but age 49 and 51 guys...how?:worried: Reason I'm asking is cuz of course I want to know how to do this....I had my age 55 plan till I read this, please explain which exception you are using...
Welcome radarvectors! I don't know clester's situation, but it sounds like mayday is taking the disability retirement. Since you probably did your research, these links probably won't tell you anything you don't already know, but just in case someone else is reading and is interested...
http://www.opm.gov/retire/pre/fers/eligibility.asp
http://usmilitary.about.com/cs/generalpay/a/retirementpay.htm
http://www.opm.gov/retire/pre/fers/eligibility.asp
http://usmilitary.about.com/cs/generalpay/a/retirementpay.htm
burrocrat
Well-known member
random question, i have a friend about 4 months from retirement, where can i find a good 'retirement clock'.
maybe enter target date and it counts down minutes, hours, days, weeks etc...? even better would be one that looks at work hours, work days, Pay Periods?
i think i saw a reference to one on this board late last year, maybe nnuut?, but can't find it now.
maybe enter target date and it counts down minutes, hours, days, weeks etc...? even better would be one that looks at work hours, work days, Pay Periods?
i think i saw a reference to one on this board late last year, maybe nnuut?, but can't find it now.
BULLonPARADE
Member
Re: Leaving funds in TSP, retire like clester....??
I'm not sure myself but wouldn't it have something to do with ATC/LE retirement? If you couldn't wouldn't it render 2o years at 50 or 25 years any age null and void for FERS employee's? I'm about to be 46 myself and will have 30 years at age 48.
Don't mean to hijack the thread but have any ATCer's checked into any benefits offered under the "Century of Aviation act"? If you're not familiar you're supposedly eligible for 1.7% for the entire time with 30 years of government service not including military as I understand it.
I'm not sure myself but wouldn't it have something to do with ATC/LE retirement? If you couldn't wouldn't it render 2o years at 50 or 25 years any age null and void for FERS employee's? I'm about to be 46 myself and will have 30 years at age 48.
Don't mean to hijack the thread but have any ATCer's checked into any benefits offered under the "Century of Aviation act"? If you're not familiar you're supposedly eligible for 1.7% for the entire time with 30 years of government service not including military as I understand it.
clester
Well-known member
Re: Leaving funds in TSP, retire like clester....??
The age 55 rule is different that the 72t rule. They both avoid the 10% penalty.
The age 55 rule allows you to take payments not based on life expectancy. So, you could take $2,000/mo this year but decide next year you want $2500/mo.(You have to retire after age 55)
It is preferable over the 72t rule because it has much more flexibility.
However, The 72t rule allows you to take payments earlier (any age) but they have to be based on a life expectancy table. So, if you retire at 50, the only option to use TSP is the 72t rule. Within this rule are 3 possible methods to use. Minimum dist., Amoritization, and Annuitization. They all give different amounts. One big thing to remember is that once you start the 72t payments you can't stop or change until age 59.5
www.72t.net has calculators and lots of other great info.
The age 55 rule is different that the 72t rule. They both avoid the 10% penalty.
The age 55 rule allows you to take payments not based on life expectancy. So, you could take $2,000/mo this year but decide next year you want $2500/mo.(You have to retire after age 55)
It is preferable over the 72t rule because it has much more flexibility.
However, The 72t rule allows you to take payments earlier (any age) but they have to be based on a life expectancy table. So, if you retire at 50, the only option to use TSP is the 72t rule. Within this rule are 3 possible methods to use. Minimum dist., Amoritization, and Annuitization. They all give different amounts. One big thing to remember is that once you start the 72t payments you can't stop or change until age 59.5
www.72t.net has calculators and lots of other great info.
KevinD uses this one... http://www.timeanddate.com/counters...&day=25&year=2017&hour=12&min=00&sec=00&p0=25
clester
Well-known member
Re: Leaving funds in TSP, retire like clester....??
Fers and TSP are two totally different pots of money. You would have to meet the ATC retirement rules and retire before doing anything with TSP.
The 1.7% for all years ATC is the best way to go if you qualify. I do, but I'm not waiting around for it. You have to be born 1956-1964 (I think) when the minimum retirement age is 56 for those people. That is, of course, when ATCers have to retire. So, Age 56 with at least 30 years.
Fers and TSP are two totally different pots of money. You would have to meet the ATC retirement rules and retire before doing anything with TSP.
The 1.7% for all years ATC is the best way to go if you qualify. I do, but I'm not waiting around for it. You have to be born 1956-1964 (I think) when the minimum retirement age is 56 for those people. That is, of course, when ATCers have to retire. So, Age 56 with at least 30 years.
radarvectors
New member
Re: Leaving funds in TSP, retire like clester....??
OK, clester, I'm clear on all the rules, know the difference between the 72t and the sepp. I'm just trying to clear up any confusion on my end regarding which one you are taking...must be a 72t and not a seppp since you are 49....unless you are going under some kind of disability...that's why I'm confused....I thought I had it all figured out, then saw your post about being 49...OK...what's this guy doing!?
As you said the SEPP is much more desireable than the 72T in that you can get more up front if you need it....like me, hehe...not giving up this awesome house on the lake...or the payment that goes with it!!
Now, one last question for anyone doing the SEPP from TSP...is there a form/calculator interface with TSP to do this conveniently, or do you have to call someone at TSP to set this up when you are readyu to pull the trigger close to 55? Thanks for all the great discussion and the welcome to the board all!
OK, clester, I'm clear on all the rules, know the difference between the 72t and the sepp. I'm just trying to clear up any confusion on my end regarding which one you are taking...must be a 72t and not a seppp since you are 49....unless you are going under some kind of disability...that's why I'm confused....I thought I had it all figured out, then saw your post about being 49...OK...what's this guy doing!?
As you said the SEPP is much more desireable than the 72T in that you can get more up front if you need it....like me, hehe...not giving up this awesome house on the lake...or the payment that goes with it!!
Now, one last question for anyone doing the SEPP from TSP...is there a form/calculator interface with TSP to do this conveniently, or do you have to call someone at TSP to set this up when you are readyu to pull the trigger close to 55? Thanks for all the great discussion and the welcome to the board all!
radarvectors
New member
1.7% for good time...but don't forget....NO COLA...
One of the drawbacks against the 1.7% is NO COLA for years between 56 and 62 (I think it is 62, could be wrong on the end date, pretty sure tho)...what do you all think inflation will do in the next 10-15 years???
The other is having to stick around to age 56.:suspicious:
One of the drawbacks against the 1.7% is NO COLA for years between 56 and 62 (I think it is 62, could be wrong on the end date, pretty sure tho)...what do you all think inflation will do in the next 10-15 years???
The other is having to stick around to age 56.:suspicious:
