Your TSP is built for saving. Eventually, though, the IRS expects you to start taking money back out.
Those mandatory withdrawals are called Required Minimum Distributions, or RMDs. If you have a traditional TSP balance and are approaching retirement age, understanding when they start and how they work should be part of your income planning.
What Are TSP RMDs?
An RMD is the minimum amount the IRS requires you to withdraw each year from tax-deferred retirement accounts, including the traditional portion of your TSP.
The idea is simple: the government allowed those contributions and earnings to grow tax-deferred for years, but eventually taxes need to be paid.
When Do You Have to Start?
Your RMD age depends on your birth year:
- Born before 1951: RMD age is 72
- Born from 1951 through 1959: RMD age is 73
- Born in 1960 or later: RMD age moves to 75
Your first withdrawal is due by April 1 of the year after reaching your required age. After that, annual distributions generally must be completed by December 31 each year.
Many retirees choose not to delay the first distribution because postponing it can create two taxable withdrawals in the same calendar year.
Roth TSP Balances Got a Break
One change many participants missed took effect in 2024. Prior to that, both traditional and Roth TSP balances were part of the RMD conversation. Beginning January 1, 2024, Roth TSP balances are no longer subject to lifetime RMD requirements.
That means money in the Roth portion of your TSP can continue growing without forced withdrawals during your lifetime. For participants who built sizable Roth balances, this created additional flexibility when planning retirement income.
How the Amount Is Determined
You do not need to calculate the distribution yourself. The TSP handles that process using:
- Your traditional TSP balance from December 31 of the previous year
- IRS life expectancy tables based on your age
Each year, the TSP provides notice of the required amount.
What Happens If You Forget?
Missing an RMD can be expensive. Historically, the penalty was 25% of the amount that should have been withdrawn. Fortunately, the TSP includes a safeguard.
If you have not taken enough to satisfy your requirement, the plan can automatically distribute the remaining amount from your traditional balance.
For the first RMD year, this generally happens by mid-March of the following year. In later years, the TSP typically steps in before year-end if the requirement has not been met. That safety feature helps avoid missed distributions, but it can also result in money leaving your account sooner than expected.
What About Surviving Spouses?
If a spouse inherits a TSP account and becomes a beneficiary participant, RMD rules still apply.
The exact timing depends on whether the original participant had already started distributions before death, but future RMD calculations are generally based on the surviving spouse’s age.
The Bigger Picture
RMDs are not optional, but they do not have to be disruptive either. The important part is knowing when they begin, understanding which portion of your TSP is affected, and fitting those withdrawals into your broader retirement income strategy.
A Federal Retirement Consultant (FRC®) can help you evaluate how TSP distributions, taxes, and retirement income planning work together as you move through retirement.
