RMD calculation on TSP for someone retiring at age 72
My client will be retiring from the government in December 2017. He will need to take his “first” RMD before December 2017. I believe that you calculate the distribution using the IRS RMD tables for someone age 72. That would mean dividing his 12/31/2016 balance by 25.6. Correct? Contributions were made after 12/31/2016. Note: the plan allowed him to postpone distributions until retirement.
Many thanks as always …… Mary!
Permalink Submitted by Alan - IRA critic on Thu, 2017-09-21 00:52
Although he will have an RMD for 2017, he does not have to take it until 4/1/2018, which is his required beginning date. Since he will have worked all year in 2017, he will probably be in a lower tax bracket in 2018 even though he will have to take 2 RMDs in 2018 if he defers the 2017 RMD into 2018. His 2017 RMD will still be based on the plan balance on 12/31/2016 and his age as of 12/31/2017. 25.6 is the correct divisor for 2017 assuming he is 72 on 12/31/2017.