TSP to IRA RMD question

Submitted by Toby Hartley on Wed, 2021-04-07 20:10

Client turns 72 this Nov. Normally we’d look at taking RMD during the rollover so that she did not have to double distribute next year. However, my question is, being that the funds are currently, and were on 12/31/2020 TSP funds if the rollover takes place the year she turns 72, will she have to take and RMD at all for this year?

Thanks



Submitted by Alan - IRA critic on Wed, 2021-04-07 22:06

If she is retired from the TSP at the time of the IRA rollover, the TSP will have to distribute the 2021 RMD. As of 12/31/2021 the former TSP balance will be in the IRA and will generate an IRA RMD on this balance in 2022. I

Submitted by Toby Hartley on Wed, 2021-04-07 22:33

The client is still working, this is an in-service rollover.  As such, one of the issues being weighed is that RMD’s will be required on IRA, but not on the TSP until retirement(she thinks 75).     So, if she does move a portion now, the quesiton is, will there be a 2021 RMD required?

Submitted by Alan - IRA critic on Wed, 2021-04-07 22:46

No 2021 RMD under these circumstances. The first RMD implication from this rollover is the 2022 IRA RMD resulting from the higher 12/31/2021 IRA balance. 

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