Posted on Friday, 17th December 2021 by

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My previous article, Required Minimum Distributions (RMDS) – Are Your Ready,” received considerable interest. I stated, “Many are confused by the Required Minimum Distribution (RDM) requirement for ROTH accounts and how this works. According to the Thrift Savings Plan (TSP), the entire account balance, Traditional and ROTH, on December 31st of each year is used to determine your RMD for the following year.  You will receive a proportional amount from each account and receive a taxable and nontaxable distribution as specified on your end of year 1099R.”

Please forward this article to others that are required to take TSP RMDs.

The TSP stipulates that it is not an IRA, and Roth TSP contributions should not be reported as Roth IRA contributions. In addition, the TSP isn’t a 401(k) plan, it is an eligible employer plan governed under Internal Revenue Code (IRC) § 401(a). Therefore, rules and regulations associated with satisfying RMDs for IRAs and 401 (k) plans don’t apply to the TSP. Unlike with IRAs and 401(k) plans, IRC requirements for RMDs apply to 401(a) plans like the TSP with no exceptions; therefore, RMDs will apply to Roth money in your TSP account, even though they may not apply to Roth money in your IRAs and/or 401(k) plans.

Roth contributions and earnings are tax-free provided certain IRC rules are met. The Roth TSP contributions you make to your TSP account have already been taxed; therefore, you will not owe taxes on those contributions when a distribution is made from your TSP account. Earnings on Roth balances become tax-free when the following conditions are met: 5 years have passed since January 1 of the calendar year in which you made your first Roth contribution and you have reached age 59½ or older, become permanently disabled, or deceased.

With the traditional TSP, your contributions go into the TSP before tax withholding. However, when you take money from your traditional TSP, you’ll pay taxes on both your contributions and earnings at the income tax rate of the year you make the withdrawal.

Although traditional and Roth money must be kept separate in your account for tax purposes, the two “pots” of money together make one TSP account balance. Any transactions you make-such as interfund transfers (IFTs), contribution allocations (CAs), and beneficiary designations-will apply in equal proportions to the traditional and Roth balances. Additional information is available at

If you wish to keep your ROTH account invested and don’t need the money, TSP Participants may transfer their accounts to a qualified trust or an eligible retirement plan (as defined in IRC § 402(c)(8)). An eligible retirement plan can be either an IRA or an eligible employer plan. The transferred account will continue to grow tax free. Your beneficiaries —other than a surviving spouse—will be required to take RMDs.

Before leaving the TSP review the article, The TSP Advantage (Should I Stay or Go). There is a lot to consider, the TSP offers the lowest fund management fees in the business and the G Fund is guaranteed never to decrease in value, something no other fund can match.

When transferring a ROTH and/or traditional SEP accounts to another financial firm, call the new firm to coordinate the transfer and set up new accounts. Complete the TSP-99 form and submit it to the TSP. Contact the TSP at (877) 968-3778 if you require assistance.

I would like to thank Anita W, one of our newsletter subscribers. She forwarded me a reply that she received from the TSP about this subject, it was very helpful.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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2 Responses to “RMDs Revisited – Clarification”

  1. linda chen Says:

    hi, Dennis:
    Where we can see Anita W’s reply that she received from the TSP?
    I would consider transferring directly transfer Roth TSP to Roth IRA to avoid RMD when I can.


  2. Dennis Damp Says:

    The majority of Anita’s reply from the TSP was included in the article, the only thing I left out was contact information for the TSP. I added information on ways to avoid taking RMDs from your TSP ROTH by transferring it to a ROTH IRA.