TSP Withdrawal Requirement Could Be Altered

Among the tax measures up for consideration in Congress are proposals to change the required minimum distribution rules for withdrawals from tax-favored retirement savings plans including the Thrift Savings Plan. Under current policy, withdrawals must begin in the year after the account holder turns age 70 1/2 and the withdrawal is based on life expectancy from that point. However, a bill (HR-1776) that has cleared the House committee level and could be brought to a House floor vote at any time would increase the age to 75; other pending proposals would eliminate the required distribution rule entirely. Changing the minimum distribution rule is one of a package of savings incentives that tax leaders hope to move this year.