Required minimum distribution, better to wait?

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I am a retired Federal Employee with a Thrift Savings Plan. My birthday is on July 10, 1947. I calculated a while ago that I could wait up to April 1, 2019 to take my MRD. Is this correct. Would it be better tax wise to begin the distribution now in 2018? Opinions please. Thanks.

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Asked on August 27, 2018 8:59 pm
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If you take your required minimum distribution on or before December 31, 2018 it will be taxable income this year. If you wait until April 1, 2019 it will be taxable income next year. What will drive your decision is the effect the distribution will have on your taxes in 2018 or 2019. I suspect that you will know the answer to this question close to the end of 2018.
All minimum distributions after the first one have to be taken by December 31 of the year in question, while the first one can be delayed until April 1 of the year after the year in which you turn 70 1/2; so, if you wait until April 1, 2019, to take your initial distribution, you will have to take your second distribution by December 31, 2019, giving you two distributions in one year. If your tax situation is relatively similar in 2018 and 2019, it might make sense for you to take your initial distribution on or before December 31, 2018. Assume you have $500,000 in your TSP; your RMDs would be in the $18,000 range. Ask yourself if it’s better to have $18,000 of extra income in each of two years, or no extra income in one year and $36,000 of extra income in the other.

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Answered on August 27, 2018 10:41 pm
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Thank you!

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Answered on August 28, 2018 11:26 am
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Thank you!

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Posted by (Questions: 1, Answers: 2)
Answered on August 28, 2018 11:26 am