The TSP finalized a policy change suspending for this year the general requirement that retired account holders take annual required minimum distributions, or RMDs.

The suspension was ordered by one of the recently enacted Coronavirus relief bills (the “CARES Act”), in response to market losses this year that could result in account holders withdrawing funds at a loss even if they do not need the money.


The RMD rule requires those past age 72 and retired (the pertinent age was 70 ½ until a law enacted late last year raised it, effective with those who had not reached that age by the end of last year) to withdraw from their accounts a percentage of the balance based on their age.

Said the TSP (in its words):

-You do not need to make any withdrawals from your TSP account in 2020 to satisfy an RMD, regardless of your age or employment status.

-We will not send any automatic RMD payments for 2020.

-If you make a withdrawal, we will withhold for federal taxes at the rate appropriate for the type of withdrawal you make, without regard to RMD rules that would otherwise apply. You can transfer or roll over to an IRA or eligible employer plan any otherwise eligible withdrawals you make.

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