I'm not sure if we can get you to $2,000 a month but yes we can get some revenue from your TSP without paying a penalty.dell said:
You said you are 52. If you start taking money out via Life Expectancy then you have to continue to do it until you are 59 1/2. If you stop, or suddenly take a lump sum, you will pay a penalty retroactively on everything that you have taken out.
As far as how much you will get. The TSP only uses one method of Life Expectancy calculations. At age 52 your IRS life expectancy is about 83 or 84 which means you have 32 years of life expectancy. The first year you would get 1/32 of your account, divided by 12, each month. If you had an account balance of 300,000 that would amount to about $780 a month. Then they would re-calculate each year with your new balance and your new LI.
There is another method that allows you to apply a reasonable interest rate to your balance. The TSP does not use this method so you would have to roll your money out of TSP and into an IRA. I'm sure if you did some homework, you could find a company that does all the calculations the way TSP does for us. Draggen3 posted a link a few posts back to a good calculator for estimating what you would get using this method. I find that if I apply the largest allowable interest rate (which changes each month and is currently somewhere around 5.7%) that it about doubles the amount I can withdraw. Now your 300,000 is getting you about $1500 or $1600 a month. Keep in mind you are still paying taxes on this money. You are avoiding only the penalty. Of course the down side to this method, other than having to move your money, is that drawing more will cause your account to deplete faster.
Here's a good question for someone who knows more about this stuff than me. Are you allowed to trade your account the way we do here while you are drawing this via this method, or are you forced into the G fund so that you will return something close to the allowable interest rate?
Man this is a wordy post. Somebody cut me off next time.
Dave
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