Hallatauer
Member
If I take a monthly payout from my TSP under IRS 72t rule at age 52... can I change how I get the payout when I turn 59 1/2 or am I stuck with the TSP's set amt forever?
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TSP 72t
- Thread starter Hallatauer
- Start date
clester
Well-known member
At 59.5 you are out from under the rules unless it's been less than 5 years. So starting at 52 you are good.
Kaufmanrider
Member
Personally, I am planning on rolling my TSP into an IRA with an option to do the 72T if I need extra money. 72t.net is an informative website.
Hallatauer
Member
Thanks... I'll check out that website 
I am on the fence on whether to remove the money to a self directed IRA. The ROI I'm getting in the TSP is great but I like having more control over when and how much I take out.
I am on the fence on whether to remove the money to a self directed IRA. The ROI I'm getting in the TSP is great but I like having more control over when and how much I take out.
Hallatauer
Member
Read over 72t.net... great site and information. One thing I cannot find on the tsp.gov website. If I elect to leave my money in the TSP and set up monthly withdrawals under a SEPP plan, what TSP form do I use? I see forms listed for every situation you can imagine but that one. One time full withdrawal, changing from monthly to full, changing monthly, etc. are all there but the one I'm looking for.
clester
Well-known member
I believe it's an option of the full withdrawal.
Boghie
Well-known member
I really have no idea, but I would advise you to get 100% confirmation. I think these decisions are of the final sort.
By the way, Clester is probably right in these things. But, I would recommend contacting a financial adviser with lots of experience with TSP (or a mid to high level TSP person) before making the move. Your goal really shouldn't be that rare so the fact that they are not built for it is kinda concerning...
clester
Well-known member
You are withdrawing your full account over your life expectancy. You do have an option of a one time lump sum withdrawal anytime. At 59.5 you can start changing your monthly payments each january to whatever you want but don't mess with it at all untill then because you will owe a penalty. If you need help determining how much to make your payments to comply with 72t rules let me know. Since rates are so low I would probably do the minimum distribution method and tsp will calculate that for you and it's easier for tax purposes. It's easy. It adjusts on its own each year and usually means an increase ( sorta like a cola). It really depends on how much you want each month.
Kaufmanrider
Member
From the TSP Booklet on withdrawing funds after separation, available on TSP website:
Page 4:
Full Withdrawal
When you are ready to choose among the withdrawal options for your entire account balance, there are a number
of ways you can do so .
A single payment. You can withdraw your entire TSP
account balance in a single payment .
A series of monthly payments. You can withdraw your
TSP account in a series of substantially equal monthly
payments until it is completely paid out . You can choose:
• Monthly payments computed by the TSP based on
IRS life expectancy tables. Your initial payment
amount will be based on your age and your account
balance at the time of the first payment . Each year,
on the anniversary of the date of your first monthly
payment, the TSP will recalculate the amount of
your monthly payments . The recalculation will be
based on your age and your account balance at the
end of the preceding year .
• A specific dollar amount. You will receive payments
in the amount that you request until your entire account balance has been paid to you . The amount of
each monthly payment must be $25 or more .
You can use the monthly payment calculators on the TSP
website to estimate how many monthly payments you
can receive from your account when you choose a specific
dollar amount, or to estimate how much you can receive
each month if you choose monthly payments based on
your life expectancy . Remember that investment gains or
losses could cause your account balance to increase or decrease, which could expand or reduce either the amount
of your monthly payments or their duration
and on page 6:
However, if you are receiving a series of monthly payments, you can at any time change to a final single payment, or change where or how your payments are sent .
Refer to the TSP website for detailed instructions . In
addition, during the annual change period at the end
of each calendar year, you can change the dollar amount
of your payments, and you can make a one-time-only
change from TSP-computed payments to a specified
dollar amount . When you make a change during the
annual change period, the TSP must receive Form
TSP-73, Change in Monthly Payment Amount, from you
by December 15 for the change to be effective with the
first payment you receive after December 31
Page 4:
Full Withdrawal
When you are ready to choose among the withdrawal options for your entire account balance, there are a number
of ways you can do so .
A single payment. You can withdraw your entire TSP
account balance in a single payment .
A series of monthly payments. You can withdraw your
TSP account in a series of substantially equal monthly
payments until it is completely paid out . You can choose:
• Monthly payments computed by the TSP based on
IRS life expectancy tables. Your initial payment
amount will be based on your age and your account
balance at the time of the first payment . Each year,
on the anniversary of the date of your first monthly
payment, the TSP will recalculate the amount of
your monthly payments . The recalculation will be
based on your age and your account balance at the
end of the preceding year .
• A specific dollar amount. You will receive payments
in the amount that you request until your entire account balance has been paid to you . The amount of
each monthly payment must be $25 or more .
You can use the monthly payment calculators on the TSP
website to estimate how many monthly payments you
can receive from your account when you choose a specific
dollar amount, or to estimate how much you can receive
each month if you choose monthly payments based on
your life expectancy . Remember that investment gains or
losses could cause your account balance to increase or decrease, which could expand or reduce either the amount
of your monthly payments or their duration
and on page 6:
However, if you are receiving a series of monthly payments, you can at any time change to a final single payment, or change where or how your payments are sent .
Refer to the TSP website for detailed instructions . In
addition, during the annual change period at the end
of each calendar year, you can change the dollar amount
of your payments, and you can make a one-time-only
change from TSP-computed payments to a specified
dollar amount . When you make a change during the
annual change period, the TSP must receive Form
TSP-73, Change in Monthly Payment Amount, from you
by December 15 for the change to be effective with the
first payment you receive after December 31
Hallatauer
Member
Yup... printed out the form and it has the option for monthly payments and also the option to do it based on life expectancy. Do have to be careful as there are no backsies once the form is filed.
