Required Minimum Distributions (RMDs) can feel like one of those distant, technical details that don’t really matter until suddenly, they do. For federal employees who’ve done a great job saving in their Thrift Savings Plan (TSP) and other retirement accounts, RMDs can turn into what many call “the tax time bomb of retirement.”

The good news? With a little proactive planning and understanding, RMDs can be managed—so they don’t manage you.

Let’s break down what RMDs are, when they begin, how they affect your TSP, and what strategies you can use to minimize the tax hit once they start.

What Are RMDs?

When you contribute to your traditional TSP, traditional IRA, or other pre-tax retirement accounts, you’re deferring taxes until you take the money out. Eventually, the government wants its share. That’s where RMDs come in.

RMDs are mandatory withdrawals that begin once you reach a certain age. The goal is simple (at least from the IRS’s perspective): you can’t keep your money in tax-deferred accounts forever. RMDs ensure that retirement savers start withdrawing funds—and paying taxes—on those balances.

So even if you don’t need the money from your TSP or IRA, you’ll still be required to take it out. And those withdrawals are taxed as ordinary income.

When Do RMDs Start?

The age at which RMDs start has shifted over time thanks to changes in legislation. As of now, here’s when it starts:

When Were You Born?RMD AgeBefore July 1, 194970.5July 1, 1949 – December 31, 195072January 1, 1951 – December 31, 195973January 1, 1960 or later75

Your first RMD must be taken by April 1st of the year after you reach your RMD age. Every RMD after that must be taken by December 31st each year.

Here’s an example:

If you turn 73 in 2026, your first RMD is due by April 1, 2027. However, your second RMD is due by December 31, 2027. That means you could end up taking two RMDs in the same year—potentially doubling your taxable RMD for one year.

That’s why many retirees choose to take their first RMD in the same calendar year they reach the starting age to avoid the double hit.

How Much Do You Have to Take Out?

Your RMD amount is based on the balance in your account at the end of the previous year and a factor from the IRS Uniform Lifetime Table, which represents your expected remaining lifespan.

In simple terms, you take your account balance and divide it by the number on the IRS chart that corresponds to your age.

Note: These numbers and charts are updated over time, and I can’t promise to have this post updated every time there is a change, so you will want to make sure you are using the right numbers!!!

AgeDistribution Period7227.47326.57425.57524.67623.77722.97822.07921.18020.28119.48218.58317.78416.88516.08615.28714.48813.78912.99012.29111.5

Example:

If you have $500,000 in your TSP and you’re 75 years old, the distribution period is 24.6.

So your RMD would be $500,000 ÷ 24.6 = $20,325.

Each year, as you get older, your life expectancy factor decreases—which means your RMD percentage increases. In other words, the older you get, the more the government makes you take out.

Do RMDs Apply to Roth Accounts?

This is a key distinction.

Roth IRAs are not subject to RMDs. You can let that money grow tax-free for as long as you live.

Roth TSPs, however, used to be subject to RMDs.

That changed with the SECURE Act 2.0. Beginning in 2024, Roth TSPs are no longer subject to RMDs.

So, if you have Roth money in your TSP, you can keep it there as long as you want without being forced to withdraw. However, some retirees still prefer to roll their Roth TSP into a Roth IRA for greater flexibility and investment options.

How to Minimize the Tax Impact of RMDs

Here’s where smart planning makes a big difference.

1. Consider Roth Conversions Before RMDs Begin

If you retire before RMD age, you might have a window of opportunity between when your paycheck stops and RMDs start. During that time, your taxable income could be lower—making it a great time to convert a portion of your traditional TSP or IRA to a Roth IRA.

You’ll pay taxes on the amount converted that year, but it reduces the balance in your traditional accounts—meaning lower RMDs (and lower taxes) later on.

For example, if you retire at 62 with $500,000 in your traditional TSP, you could start converting $20,000–$50,000 a year to Roth while staying within your desired tax bracket. Over time, this strategy can dramatically reduce future tax burdens.

2. Start Withdrawals From the Traditional Side First

Another great strategy that people can consider is taking money from your traditional accounts before your Roth accounts.

This would reduce your traditional account balance and, in turn, the size of future RMDs. Plus, it allows your Roth accounts to continue compounding tax-free.

3. Use Qualified Charitable Distributions (QCDs)

If charitable giving is part of your retirement plan, QCDs can be one of the most tax-efficient strategies available.

Once you turn 70½, you can donate up to $100,000 per year directly from your IRA to a qualified charity. That donation counts toward your RMD but doesn’t count as taxable income.

This can reduce your adjusted gross income (AGI), helping to lower your Medicare premiums and keep your taxes down—all while supporting a cause you care about.

Note: QCDs can only be made from IRAs, not from the TSP. If charitable giving is a goal, you might consider rolling some of your TSP funds into an IRA after retirement.

What Happens If You Don’t Take Your RMD?

This is one area where the IRS does not play around. If you fail to take your RMD, the penalty used to be 50% of the amount you should have withdrawn. Recent law changes reduced the penalty to 25% (and potentially as low as 10% if corrected quickly).

Still, that’s not something you want to test.

Fortunately, the TSP automatically processes RMDs for participants once they’re required—so you’re less likely to miss one accidentally. But if you have IRAs, you’ll need to manage those withdrawals yourself.

Why RMDs Can Be a Problem—Especially for Savers

Ironically, the people most affected by RMDs are often those who’ve saved the most.

If your traditional TSP or IRA has grown into the seven figures, your first RMDs could easily push you into a higher tax bracket. That can also increase your Medicare Part B premiums.

The key is to plan early—ideally before your RMD age—to gradually reduce your pre-tax balances and control your taxable income over time.

The Bottom Line

RMDs don’t have to derail your retirement plan. With proactive steps like Roth conversions, early withdrawals, or charitable strategies, you can stay in control of your tax picture—and make sure your retirement income strategy works for you, not against you.

Federal employees who take the time to plan ahead often find that RMDs aren’t the monster they feared—they’re just another piece of the puzzle.

If you’re unsure how RMDs might affect your retirement plan, it’s worth discussing with a financial planner who specializes in federal benefits. The earlier you start, the more flexibility you’ll have to minimize taxes and maximize your lifetime income.

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