At some point, the IRS makes you start pulling money out of your TSP, whether you need it or not. These are required minimum distributions, or RMDs. The TSP will calculate and send yours automatically. But whether it comes out at the right time, in the right amount, and with the least tax damage is still up to you.
Here’s when RMDs start, how much you’ll have to take, the rules that trip people up, and what you can do before they begin.
When RMDs start
Under SECURE 2.0, your RMD age depends on when you were born:
- Born 1951–1959: RMDs start at age 73.
- Born 1960 or later: RMDs start at age 75.
Still working for the federal government? You don’t owe a TSP RMD until you separate from service.
The first-RMD deadline, and the trap
Your first RMD is due by April 1 of the year after you reach RMD age. Every RMD after that is due by December 31.
That extra time sounds helpful, but it can backfire. If you wait until April 1 for your first RMD, your second one is still due December 31 of that same year. That puts two taxable RMDs on one tax return, which can push you into a higher bracket and raise your Medicare premiums.
For example, say you turn 73 in 2026 and delay your first RMD to March 2027. You’d then take both your 2026 and 2027 RMDs in 2027. For many people, it’s better to take the first RMD in the year you actually reach RMD age.
How much you’ll have to take
Your RMD is your traditional TSP balance on December 31 of the prior year, divided by a factor from the IRS Uniform Lifetime Table. The factor shrinks each year, so the percentage you must take rises as you age.
| Age | Factor | Required share of balance | RMD on a $500,000 balance |
|---|---|---|---|
| 73 | 26.5 | 3.8% | $18,868 |
| 75 | 24.6 | 4.1% | $20,325 |
| 80 | 20.2 | 5.0% | $24,752 |
Illustration only. Assumes the same $500,000 balance at each age; in reality your balance will change with withdrawals and market returns.
If your spouse is your sole beneficiary and more than 10 years younger than you, you use the IRS Joint Life table instead, which gives a smaller RMD.
How the TSP handles it
Once you’re separated and have reached RMD age, the TSP does much of the work for you:
- It calculates your RMD from your December 31 traditional balance.
- It counts what you’ve already taken. Installment payments and partial withdrawals during the year count toward your RMD.
- It pays any shortfall automatically by December 31 if your other withdrawals haven’t covered it.
Roth TSP is exempt. Roth balances in the TSP have had no RMDs since 2024. Only your traditional balance counts toward the RMD.
Rules people trip on
- No mixing accounts. An IRA withdrawal can’t satisfy your TSP RMD, and a TSP withdrawal can’t satisfy an IRA RMD. Each one has to be taken from its own account.
- No rollovers or conversions. An RMD can’t be rolled over to an IRA or converted to Roth.
- RMDs raise your income. That extra income can increase your Medicare IRMAA premiums, make more of your Social Security taxable, and reduce the new $6,000 senior deduction (available 2025–2028).
Missing an RMD costs you
If you don’t take your full RMD, the IRS charges an excise tax of 25% of the amount you missed. That drops to 10% if you correct it within two years. Because the TSP sends any shortfall automatically, this is rare for TSP-only balances, but it’s a real risk if you also hold IRAs.
Shrink your RMDs before they start
The biggest lever you have is what happens in the years before RMD age. Three moves can make your future RMDs smaller:
- Roth conversions in the gap years. Moving money from traditional to Roth while your income is low reduces the balance that RMDs are calculated on. You can now do this inside the TSP.
- Planned withdrawals before 73 or 75. Taking some money out on your own schedule, in low-bracket years, can spread the tax over more years.
- Qualified charitable distributions (QCDs) at 70½ or older. If you give to charity, QCDs can send money straight from an IRA to a charity without it counting as income. QCDs aren’t available from the TSP, so this means moving some money to an IRA first.
The bottom line
The TSP will make sure you take your RMD. It won’t make sure you take it in the smartest way. Know your RMD age, avoid doubling up in your first year, and use the years before RMDs start to shrink them. The best time to plan for RMDs is about 10 years before they begin.
Within 12 months of retirement, or already retired, with $1 million or more invested? Book a free 15-minute Fit Call with our team at Haws Federal Advisors. We’ll help you map out your RMD years before they arrive.
This article is for educational purposes only. It isn’t tax, investment or legal advice. Talk with a qualified tax professional about your situation.