RMD question

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Topic Author
tadamsmar
Posts: 9260
Joined: Mon May 07, 2007 12:33 pm

RMD question

Post by tadamsmar »

My wife will have a Federal TSP account and a Vanguard account when she turns 70.5 unless we reconfigure before she retires.

Will she have to make a RMD withdrawal from each account? Or can we just withdraw as we please from either as long as we meet the total RMD threshold for both accounts together?
User avatar
Mel Lindauer
Moderator
Posts: 31503
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: RMD question

Post by Mel Lindauer »

tadamsmar wrote:My wife will have a Federal TSP account and a Vanguard account when she turns 70.5 unless we reconfigure before she retires.

Will she have to make a RMD withdrawal from each account? Or can we just withdraw as we please from either as long as we meet the total RMD threshold for both accounts together?
You can withdraw from whichever account you want, as long as you meet the total RMD.

Regards,

Mel
User avatar
LH2004
Posts: 1741
Joined: Tue Mar 27, 2007 4:59 pm
Location: New York, NY

Re: RMD question

Post by LH2004 »

Mel Lindauer wrote:
tadamsmar wrote:My wife will have a Federal TSP account and a Vanguard account when she turns 70.5 unless we reconfigure before she retires.

Will she have to make a RMD withdrawal from each account? Or can we just withdraw as we please from either as long as we meet the total RMD threshold for both accounts together?
You can withdraw from whichever account you want, as long as you meet the total RMD.
I will admit I don't know the particular rules applicable to the TSP, but that would be unique among employer plans if that were correct.
User avatar
Topic Author
tadamsmar
Posts: 9260
Joined: Mon May 07, 2007 12:33 pm

Re: RMD question

Post by tadamsmar »

LH2004 wrote:
Mel Lindauer wrote:
tadamsmar wrote:My wife will have a Federal TSP account and a Vanguard account when she turns 70.5 unless we reconfigure before she retires.

Will she have to make a RMD withdrawal from each account? Or can we just withdraw as we please from either as long as we meet the total RMD threshold for both accounts together?
You can withdraw from whichever account you want, as long as you meet the total RMD.
I will admit I don't know the particular rules applicable to the TSP, but that would be unique among employer plans if that were correct.
1 yes, 1 no? :?:
gassert
Posts: 178
Joined: Thu Apr 26, 2007 7:50 pm

Post by gassert »

Well - if the 2 accounts are both 403bs then the answer is yes, you can take from either/or as long as the total requirement is satisfied. [Dito if there were both IRAs, which TSP clearly is not].

If the accounts are 403b and IRA or 403b and 401k or 401k and 401a, etc etc, then the answer is no. You must take the required amout from each.

I supose the assumption is that TSP is 403b, but VG could be anything. Also check the TSP rules b/c I thought I saw that past 70.5 there were times a full distribution or rollover was required.
gassert
Posts: 178
Joined: Thu Apr 26, 2007 7:50 pm

Post by gassert »

Also - FYI the required begin date of RMD is the later of retirement year or 70.5 whichever is later, so if she's 75 and still with Govt, then roll the VG to TSP and avoid RMDs. Or keep seperate, but rules would be different for each.

I mention this becuase you said you need to take action before she "retires" but unless shes past 70.5 then you need to take action prior to the year she's "70.5", not when she "retires"
User avatar
Mel Lindauer
Moderator
Posts: 31503
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Post by Mel Lindauer »

Given the other answers you've gotten, I would say you'd better check the contractual obligations of the TSP, since my answer applied to two IRAs, and apparently that's not the case here.

Regards,

Mel
User avatar
HueyLD
Posts: 8121
Joined: Mon Jan 14, 2008 10:30 am

Re: RMD question

Post by HueyLD »

tadamsmar wrote:My wife will have a Federal TSP account and a Vanguard account when she turns 70.5 unless we reconfigure before she retires.

Will she have to make a RMD withdrawal from each account? Or can we just withdraw as we please from either as long as we meet the total RMD threshold for both accounts together?
Your wife will have a separate RMD requirement from her TSP because government wants to make sure that most of her qualified retirement plan benefits are paid to her during her lifetime, rather than to her beneficiaries after death. She can only combine accounts to satisfy the RMD if she has more than one qualified employee account.

Below is a quote form the IRS pub 575 http://www.irs.gov/publications/p575/ar02.html#d0e4601
Combining multiple accounts to satisfy the minimum distribution requirements. Generally, the required minimum distribution must be figured separately for each account. Each qualified employee retirement plan and qualified annuity plan must be considered individually in satisfying its distribution requirements. However, if you have more than one tax-sheltered annuity account, you can total the required distributions and then satisfy the requirement by taking distributions from any one (or more) of the tax-sheltered annuities.
Good luck and happy retirement.
Post Reply