Required Minimum Withdrawals at Age 73
Understanding TSP Withdrawals
- The Thrift Savings Plan (TSP) requires you to take Required Minimum Distributions (RMDs) at age 73.
- This mandate ensures that savings in tax-deferred retirement accounts are eventually taxed.
Strategy If You Don’t Need the Withdrawal
- If you don’t need the RMD for your living expenses, consider using it strategically.
- One option is to invest in long-term care insurance. This can be a wise move to manage future healthcare costs.
Offsetting Inheritance Taxes for Beneficiaries
- Another strategy is to use the TSP RMD to offset inheritance taxes.
- This can be achieved by rolling the RMD into an annuity with an enhanced death benefit.
- This approach can provide financial benefits to your heirs.
Strategies for Using TSP RMDs
|Long-Term Care Insurance
|Invest RMD in a long-term care policy
|Manages health costs, provides peace of mind
|Annuity with Death Benefit
|Roll RMD into an annuity with enhanced death benefit
|Offsets inheritance taxes, benefits heirs
Understanding and strategically using your TSP RMD at age 73 can provide significant financial benefits, both for your retirement and for your beneficiaries. Consider options like long-term care insurance and annuities with enhanced death benefits to make the most of these distributions.
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