Basics: required Minimum distributions
Section 1: Regulatory Context
RMDs are mandatory annual withdrawals required by Internal Revenue Code Section 401(a)(9) once a participant reaches a specific age and is separated from federal service. The SECURE 2.0 Act of 2022 progressively increased the “Required Beginning Date” (RBD) age. For participants born between 1951 and 1959, the RMD age is 73; for those born in 1960 or later, it will increase to 75 starting in 2033. Failure to withdraw the required amount may result in an IRS excise tax of 25% of the shortfall, which may be reduced to 10% if corrected within two years. The Thrift Savings Plan (.gov) +4
Section 2: If/Then Scenarios
- Ifย a participant is still actively employed by the federal government,ย thenย they are not required to take RMDs from their TSP, regardless of age, until April 1 of the year following their separation.
- Ifย a participant has aย Roth TSP balance,ย thenย as of 2024, that balance isย excludedย from RMD calculations and is not subject to mandatory lifetime distributions.
- Ifย the account is aย Spousal Beneficiary Participant Account,ย thenย the RMD calculationย still includes the entire balanceย (both Traditional and Roth), and any distribution counts toward the requirement.
- Ifย a participant reaches their RMD age in 2026,ย thenย they must take their first RMD byย April 1, 2027, though doing so will require taking a second RMD for the 2027 tax year by December 31.ย
The Thrift Savings Plan (.gov)ย +5
Section 3: System Integration
The TSP record keeper calculates RMDs annually based on the account’s prior-year December 31 balance and IRS life expectancy tables. In early January, the TSP sends RMD Calculation Notices to affected separated participants and spousal beneficiaries. If a participant’s total voluntary withdrawals throughout the year do not satisfy the RMD, the system will automatically trigger a supplemental payment in mid-December to meet the legal minimum. These payments are issued pro rata from all available investment funds. The Thrift Savings Plan (.gov) +6
Section 4: 3-Step Action Plan
- Monitor Your Secure Mailbox:ย Review theย RMD Noticeย sent in January viaย My Accountย to confirm your specific required amount for the current tax year.
- Coordinate Voluntary Withdrawals:ย If you plan to takeย Installment Paymentsย or lump sums, ensure they are scheduled to be processed before theย mid-December automated RMD deadlineย to maintain control over your tax withholding.
- Update Direct Deposit:ย Confirm your financial institution information inย My Accountย to ensure any automated supplemental RMD payments are deposited correctly and avoid paper check delays.ย
Would you like to examine the rules for FERS Survivor Annuities or FEGLI Life Insurance next?
