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One topic that generates lots of participant questions is required minimum distributions (RMDs), which the IRS requires for most retirement plans, not just the TSP. In this email, we’ll go into detail about what RMDs are, how they work, and when they begin. But let’s start with the bottom line:
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When you retire, you don’t have to do anything with your TSP account immediately as long as you maintain the minimum account balance of $200. You don’t have to withdraw any money at all from the TSP until you reach the age that the IRS requires you start taking required minimum distributions.
- Even then, you can stay with the TSP: After you reach your RMD age, we'll automatically send you a payment to satisfy any required amount before the deadline each year as long as we have your correct information. In other words, when it comes to RMDs on your TSP account, we’ll take care of them for you.
What is an “RMD”?
Once you’ve left the federal government or uniformed services and reach a certain age, the IRS requires that you receive a portion of your TSP account (your “required minimum distribution” or “RMD”) annually.
After they begin, there is a calculation based on your account balance that determines how much of your account you’ll need to receive each year. Your RMD calculation will only include your traditional (pre-tax) balance, since any Roth (after-tax) money in your account is no longer subject to RMDs.* As a result, only withdrawals from your traditional balance (not Roth) will count toward satisfying the RMD amount.
When do RMDs start, and when are they due?
The first year in which you’re separated from federal service and have reached your applicable RMD age or older is called your “first distribution calendar year.” If you’re already taking withdrawals when you reach RMD age, it’s possible that the amounts you take out will be enough to satisfy your RMD for the year. If not, we’ll send you your first RMD (or whatever is left of it) by April 1 of the following year. That date is called your “required beginning date.”
This chart summarizes RMD ages for those who have already left (separated from) federal or uniformed service:
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Participant's
Date of Birth
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RMD Age
(if separated)
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Required Beginning Date (if separated)
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Before Jan. 1, 1951
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Already passed
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April 1 of the
year after you left federal service
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Jan. 1, 1951 –
Dec. 31, 1959
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73
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April 1 of the year after you turn 73 or older and have left federal service
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After Dec. 31, 1959
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75
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April 1 of the year after you turn 75 or older and have left federal service
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After your first RMD, the deadline for receiving them becomes December 31 each year. This means that during your second distribution calendar year, you may have two RMDs: one by April 1 for your first RMD year and another by December 31 for your second. After year two, you’ll have just one RMD, due December 31. We’ll automatically send these to you as needed.
What happens after RMDs start?
Based on your birthdate and traditional (non-Roth) account balance, the TSP will calculate your RMD amount. Just make sure we have your correct date of birth and separation date. We’ll send you a payment to satisfy any required amount before the deadline each year. (RMDs cannot be rolled over to an IRA or eligible employer plan.)
As we’ve noted, if you’re already taking withdrawals, it’s possible that the amounts you take out yourself will be enough to satisfy your RMD for the year. If not, we’ll send you the difference. In other words, whether you’ve started taking withdrawals or not, when it comes to RMDs from your TSP account, we will take care of sending them to you.
Are there fees associated with RMDs? Will the TSP automatically process RMDs on my non-TSP accounts?
The TSP does not charge separate fees for processing RMDs on your account. We can only process the RMDs for your TSP account, not any other accounts that aren’t invested with us, and withdrawals from your non-TSP accounts cannot satisfy the RMD requirement for your TSP account. However, if you have other eligible retirement accounts that are subject to RMDs and you roll them into the TSP, then we can take care of RMDs for your consolidated amounts all at once.
How are RMDs calculated, and what is the tax withholding?
Again, it’s important to note that your Roth (after-tax) balance—if you have one—isn’t subject to RMDs, which means you can keep your Roth contributions and earnings in your TSP account as long as you want.
RMD amounts from your TSP account are calculated based on your traditional* (non-Roth) balance, using the IRS Uniform Lifetime Table. The table has a list of ages and corresponding “distribution periods,” which are set by the IRS.
Let’s say you reach age 76 in 2025. As of December 31, 2024 (the last day of the previous calendar year), your traditional (non-Roth) account balance was $300,000. Based on the Uniform Lifetime Table, the corresponding distribution period (in years) is 23.7, so your 2025 RMD would be $300,000 divided by 23.7, or around $12,660. If, during 2025, you didn’t end up taking $12,660 in withdrawals from your traditional TSP balance, we’d send you any outstanding amounts before the IRS deadline.
In most cases, RMDs on your account are treated as “non-periodic payments,” which means we must withhold 10% for federal income tax unless you contact us on the ThriftLine at 1-877-968-3778 to change it. However, there is an exception. See p. 12 of our booklet Tax Rules about TSP Payments for more.
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While the RMD process can change as new requirements come up, we wanted to address some of your questions about how it works currently. For more details, see our booklet, Tax Rules about TSP Payments.
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