RMD's and the Thrift Savings Plan....

Vladimir · December 7, 2022

New meaning to the phrase I am from the government and here to help.....phone conversation with TSP today. Truly unbelievable.

Last November after talking to agent I filled out my RMD form and sent it in return receipt requested. I did get confirmation that they got my form.

Having heard nothing from TSP. I called today.

Me: Can you tell the status of my RMD request.

TSP: Oh, we closed your RMD request.

ME: I didn't get a check.

TSP: No, we closed your RMD request. We decided not to process it.

ME: Why?

TSP: The notes don't say why?

ME:Why didn't you contact me??

TSP: Why should we contact you? The case is closed.

I think this is clearly illegal, but if the government decides it fine does that make it legal??? Would NOT forward my call to the Department that closed my request. They do not talk to the account holders. Meanwhile, I suspect the IRS will NOT be as "understanding".

Kirk W · December 7, 2022

17 minutes ago, Vladimir said:

Meanwhile, I suspect the IRS will NOT be as "understanding".

So you still have plenty of time to draw out your RMD. I had a discussion just yesterday on that same subject and mine will be deposited into my checking account directly. Those funds are managed by Blackrock Capital Advisers under contract to Federal Retirement Thrift Investment Board (FRTIB).

Vladimir · December 7, 2022

I am not sure...they promised to send me a email today. No email.

How do you withdraw money when the TSP will NOT process your request??

I will start my RMD in Jan for next year!!

Kirk W · December 7, 2022

Do you know what the required amount is? Is this the first year that you must take the RMD? Your first RMD must be taken by 4/1 of the year after you turn 72. Subsequent RMDs must be taken by 12/31 of each year. If you don't take your RMD, you'll have to pay a penalty of 50% of the RMD amount.

trailertraveler · December 8, 2022

If you are dissatisfied with the TSP, you can transfer all of your TSP account to an IRA account with a financial establishment(s) of your choosing. I did this years ago because it gave me a lot more investment options and control over my retirement funds.

Vladimir · December 8, 2022

17 hours ago, Kirk W said:

Do you know what the required amount is? Is this the first year that you must take the RMD? Your first RMD must be taken by 4/1 of the year after you turn 72. Subsequent RMDs must be taken by 12/31 of each year. If you don't take your RMD, you'll have to pay a penalty of 50% of the RMD amount.

Oh, I know what the laws were.....I had a securities license at one time. Nowadays, I have to check to make sure they have not changed.

But to have a financial services company (even if it is run by the Federal government) refuse to process a request to redeem funds and even worse a legally required Required Minimum Distribution would get somebody a jail sentence if it was a private securities firm.

12 hours ago, trailertraveler said:

If you are dissatisfied with the TSP, you can transfer all of your TSP account to an IRA account with a financial establishment(s) of your choosing. I did this years ago because it gave me a lot more investment options and control over my retirement funds.

TSP has low fees, but more importantly it has the G fund.

A unique mutual fund open ONLY to members of Congress and Federal employees. The G fund pays long-term interest rates on a daily basis with NO RISK to the underlying bond value. It is a god-send for high net worth individuals.

In high inflationary economic environments it is a real good investment.

I remember on Bob Brinkers financial show somebody tried to explain to him how the G fund worked and Bob could NOT believe it.

When Allan Greenspan was head of the Federal Reserve he kept all his investments in the G fund. He wife had plenty of money to invest in other areas.

As Bob Brinker said...."we have the best government money can buy".

I just called my other IRA trustee to get the minimum distribution amount from them instead of TSP. At least, that way I can avoid the IRS penalties.

They answered the phone quickly with a human being and it took 45 seconds for them to process my Required Minimum Distribution.

It took three minutes to set up a money market fund within my IRA account. This is where the TSP money is headed in the near future. Even those great G fund returns are not worth the pain and suffering at this point in my life.

They also said they would handle the trustee to trustee transfer of funds from TSP.

Yippeee, no more dealing with TSP.

trailertraveler · December 9, 2022

18 hours ago, Vladimir said:

TSP has low fees, but more importantly it has the G fund.

A unique mutual fund open ONLY to members of Congress and Federal employees. The G fund pays long-term interest rates on a daily basis with NO RISK to the underlying bond value.

I am familiar with the G Fund. If my memory is correct, when the TSP was first created, it was the only fund available. The stock funds were added later.

If you are interested in including U.S. government bonds in your IRA, these articles may be of interest to you. Can I Buy I Bonds with a Self-Directed IRA or Solo 401(k)?, How to Add Treasury Bonds, Bills and Notes to an IRA, 3 Ways Pre-Retirees And Retirees Can Use U.S. Series I Savings Bonds.

It is my understanding that I Bonds can be held for up to 30 years and the income tax on the interest can either be paid annually or when the bond is cashed in. The downside is that there are limits to how much an individual can invest each year.

Kirk W · December 9, 2022

For funds that I want to invest for shorter periods, I have found T-Bills to be quite effective.

Daily Treasury Bill Rates

Vladimir · December 14, 2022

Update six days later.

TWO letters from TSP and the Federal government telling me they have changed my contact information. Nothing on my required minimum distribution.

NOTHING. I didn't call them to change my contact information, I called them to have them mail me a check.

Oh, also in the mail, six days later after I called them was my check from the "other" IRA trustee.

I also included the required amount from TSP in that check.

Don't know if I will ever see my RMD check from TSP. Yeah, I can call my Congresswoman, but we have used her the past two years to get our income tax refund from the IRS.

She does have better things to do than trying to get our money back from the Federal government.

bigjim · December 29, 2022

A flash reply to Vlad. I have been hospitalized twice lately so I have not kept up with this but I was discharged yesterday and as I got a notice on my phone about my TSP RMD distribution I went to TSP and it shows they are mailing mine to my home. I supposedly had it set for auto deposit to NavyFCU. This is the second year in a row they did that and I cannot seem to talk or communicate with anyone that can help. I tried their (ava ?) chat option and found it useless. I am not happy with the new TSP at this point.