Mandatory withdrawal election under the old rules?

[Cactus]

Articles on the new TSP rules keep mentioning that we no longer have to make a full withdrawal election once we turn 70½ and are no longer working. What are they talking about? I never heard that we had to pull all our money out, only that we had to start taking a MRD as a minimum. Were we really forced to leave TSP at 70½ under the old rules? I'm glad that's not the case any more.

 

[TommyIV]

The 70.5 was a tax law that required you to start taking your RMD. Apart from the one time partial withdrawal from your TSP it meant you had to at least set up a monthly withdrawal plan for the whole of your TSP account. I'm not sure what change you're referring to except I heard they are potentially extending the RMD age to 72 in the secure act that is moving through congress.

Retirement

 

[Cactus]

Yeah, I'm not refering to the tax law. I'm talking about the changes to the withdrawl options for TSP that went into effect on Sep 15. Articles like this one (https://www.fedsmith.com/2019/09/15/tsp-changes-now-in-effect/) make it sound like we had to pull all our funds out of TSP by 70.5 under the previous TSP policy (pre Sep 15). I never heard that before and I don't think it's true. I thought we could leave it in there and at a minium withdraw the MRD as required by law.

 

[TommyIV]

I think it just went hand in hand with the Required Minimum Distributions. Since the old rules were one partial and one full, it would be necessary to initiate the full withdrawl by 70.5 yo. But if now you can do multiple partial withdrawals then it is no longer necessary to put in full withdrawal to satisfy the tax law. Anyway great information, thanks for sharing.