TSA
We have a client that is 78 years old that has a TSA account with a current value of about $4,800.
The death benefit is $124K.
The 2022 RMD is $5,450.
The RMD is based on the fair market value of the the death benefit which is $119,906.
Looking for suggestions or idea’s on the best route to take in this situation. Converting to a Roth, which would cause taxable income of about $30K or see if we can get the TSA changed to an IRA?. Client does have another IRA.
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2022-09-29 18:41
The client must distribute the full 4800 available cash value and such distribution will satisfy the RMD, since that is the full distributable value as long as client remains alive. The death benefit cannot be rolled over or distributed. Client should check with the plan administrator regarding any other options.