TSP RMDs and the Roth-TSP exemption

1. The forced withdrawal

Tax-deferred accounts come with a catch the government never forgets: eventually, it wants its tax. A required minimum distribution is the IRS forcing money out of your traditional TSP each year once you reach a certain age — whether you need the income or not — so the deferral can’t go on forever. Every dollar that comes out is taxed as ordinary income.

For most federal retirees the RMD isn’t a hardship — they’re already drawing income — but it removes control. You no longer choose whether to withdraw; the table chooses for you. That loss of control is exactly why the smartest RMD planning happens in the years before RMDs begin, and why the 2024 Roth change matters so much.

2. The big change: Roth TSP is exempt

Here’s the headline. Beginning January 1, 2024, Roth TSP balances are no longer subject to lifetime RMDs. Under SECURE 2.0, the Roth TSP finally matches the Roth IRA: you are never forced to withdraw from it during your lifetime. It can stay fully invested, growing tax-free, for as long as you want — and pass to heirs.

This rewrites a piece of conventional wisdom. For years, the standard advice was to roll your Roth TSP into a Roth IRA specifically to escape RMDs, since the old Roth TSP forced them and the Roth IRA never did. That reason is gone. You may still choose to roll Roth TSP to a Roth IRA for broader investment choices or estate flexibility — but no longer just to dodge a required distribution. If avoiding RMDs was your only motive, you can leave the money right where it is.

3. When RMDs start

SECURE 2.0 pushed the starting age back, and it now depends on your birth year:

Your required beginning date is April 1 of the year after you reach your RMD age — that’s the deadline for your first RMD only. Every RMD after that is due by December 31. As you’ll see in section 6, that gap between April 1 and December 31 hides a trap.

4. How the amount is calculated

The formula is simple division:

The factor comes from the IRS Uniform Lifetime Table and corresponds to your age. At 73 the factor is 26.5, so a $450,000 traditional balance yields a first RMD of $450,000 ÷ 26.5 = about $16,981 — roughly 3.8% of the balance. Each year the factor shrinks, so the percentage you must withdraw climbs: around 5% at 80, and over 8% by 95. If you never set up your own withdrawals, the TSP will calculate and send your RMD automatically — but you still want to know the number, because it drives your tax bill.

5. Your TSP RMD

Enter your traditional and Roth TSP balances and your age. The calculator applies the correct Uniform Lifetime factor, shows your RMD and the percentage it represents, and confirms that your Roth balance is exempt.

6. The two-in-one-year trap

That April 1 deadline for your first RMD looks like a convenience — a few extra months. It can be a tax mistake. Here’s why: your first RMD is for the year you turn 73, and you may delay it to April 1 of the following year. But your second RMD — for that following year — is still due by December 31 of that same year. Delay the first, and you take two RMDs in one calendar year.

Two RMDs stacked onto one tax return can push you into a higher bracket, increase the taxable portion of your Social Security, and — because Medicare looks back two years — trigger an IRMAA surcharge. For that reason, most retirees simply take the first RMD in the year they turn 73, on the same December schedule they’ll follow every year after. Delaying only makes sense in unusual cases — for instance, if your first RMD year happens to be a one-time high-income year.

7. The still-working exception

If you’re among the growing number of feds working into their 70s, there’s a valuable carve-out. The still-working exception lets you postpone TSP RMDs while you remain in federal service past your RMD age. Your first TSP RMD isn’t due until April 1 of the year after you separate, and that first distribution covers the year you actually retired.

Two cautions. First, the exception applies to employer plans like the TSP, not to IRAs — a traditional IRA still demands RMDs at your RMD age even while you’re working, so any IRA money you hold isn’t covered. Second, it only delays; it doesn’t erase. The year you separate, the clock starts. Still, for someone deliberately working a few extra years, it’s a clean way to keep deferring TSP taxes until the income actually stops.

8. Shrinking RMDs before they start

Because RMDs are driven by your traditional balance, the way to soften them is to shrink that balance in the low-tax years before 73. Two moves do most of the work. Roth conversions in the gap between retirement and RMD age move money from traditional to Roth at today’s rates, lowering the balance that future RMDs are calculated on — the heart of the Roth conversion window. And simply drawing down the traditional TSP early — spending it before Social Security and RMDs pile on — can flatten an otherwise spiking tax curve.

One TSP-specific limitation to know: Qualified Charitable Distributions are not available from the TSP. A QCD — sending an RMD straight to charity tax-free — can only be done from a traditional IRA. If charitable giving is part of your plan, that’s a concrete reason some retirees roll the TSP to an IRA. Fit all of this into your broader federal RMD strategy well before the first distribution is due.

9. Frequently asked questions