Tsp withdrawal

[postalstooge]

Does anyone know how the withdrawal works when you have money in traditional and Roth?

I’ll explain...suppose I have $500,000 in my tsp at retirement..$350,000 is in traditional and $150,000 is in Roth..I decide to withdraw $40,000 yearly for income, how exactly is that taxed?..meaning how much of the $40,000 am I getting from traditional and how much from Roth?..can I choose how it’s split up? Or is that something they will just calculate?


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[tsptalk]

It's proportional...

If You Have Both a Traditional Balance and aRoth Balance

When you have both types of money in your account—Rothand traditional—the approaches described in the first twoscenarios are applied proportionally.

Let’s say your account has a traditional balance of $60,000 and a Roth balance of $40,000. And the Roth balance includes $15,000 in contributions and $25,000 in earnings. You take a withdrawal of $1,000 from your account. You’re 57 years old and you do not have a permanent disability. You do not roll over or transfer any of your payment into another retirement account. What portion of this distribution is considered taxable income?

First, remember that all withdrawals are taken proportionally. Your account is 60% traditional, 15% Roth contributions, and 25% earnings on your Roth contributions. Applying those percentages to your withdrawal means that the $1,000 you received is made up of $600 from your traditional balance,$150 from your Roth contributions, and $250 from the earnings on those contributions.

Page 3.... https://www.tsp.gov/PDF/formspubs/tsp-536.pdf


Welcome - by the way!

 

[uscfanhawaii]

PS, If you have read through the TSP Withdrawals link that Tom provided, you can see that your 'simple question' has a very complicated answer!
AND....the answer depends on a lot of variables that you do not divulge (you CAN'T, really, because there are just too many variables).

That is the one disadvantage to trying to answer what appears to be a 'simple question'. I am glad that Tom referred you to the source, so you can wind your way through all the if's and's and but's!

AND...let me add another variable. The rules are being changed as we speak. New regulations are scheduled to be out by September of 2019.
See a summary of the changes at:
https://www.tsp.gov/PDF/formspubs/tspfs10.pdf

Specific to your question is:
"You’ll be able to choose whether your withdrawal should come from your Roth balance, your traditional balance, or a proportional mix of both."
Which is just one of the changes.

Hope this helps....and when do you plan to retire? CONGRATULATIONS!!!
My date is 12/31/2018!! :fest30:

 

[postalstooge]

Thanks for the help, I appreciate it..officially I can retire in 16 years but I’ll probably stick it out for 20..I have $260,000 in there now..$220,000 of that coming in the last 10 years..I plan on having more than the $500,000 I mentioned, just wanted to throw out an easy number..lol..I plan on either putting the majority of my thrift in Roth or just going up to the match in traditional and opening a Roth IRA


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