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kannon88331  
#1 Posted : Saturday, August 8, 2020 2:50:20 AM(UTC)
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We are doing financial planning and wondering how best to deal with my TSP

My understanding is that the TSP, as a 401K like investment, when inherited by our children, has to be taken as a lump sum and all of its tax implications.

On the other hand, our IRA accounts once inherited can be withdrawn over a 10 year period.

If these are true, to utilize the 10 year withdraw period, the TSP would have to be rolled over to an IRA (traditional or Roth) BEFORE we die. Is that correct?

Thanks
GWPDA  
#2 Posted : Saturday, August 8, 2020 5:20:47 AM(UTC)
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www.tsp.gov
Search the word "death".
someoldguy  
#3 Posted : Saturday, August 8, 2020 6:10:00 AM(UTC)
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I was also interested in this... and it has come up on these forums before... anyway I went to the TSP site and searched for 'death' and found a document which was very confusing.

Here's what I got out of it:

-- a SPOUSE beneficiary can get a TSP in their own name once the participant dies
-- NON-SPOUSE beneficiaries would have their funds rolled into a beneficiary IRA.

No mention of withdrawal timelines or lump sums... should have checked to see the date of the document.

The reason it was so confusing is that there are a lot of factors that go into the distribution of an account after the participant dies. I think this issue of what beneficiaries have to do when they inherit is a big reason many people decide roll their TSP into an IRA.
DISCLAIMER: You read it on an open internet forum :)
wlls  
#4 Posted : Saturday, August 8, 2020 9:32:45 AM(UTC)
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thanks 2 users thanked wlls for this useful post.
someoldguy on 8/8/2020(UTC), GordonG on 8/10/2020(UTC)
someoldguy  
#5 Posted : Saturday, August 8, 2020 3:09:46 PM(UTC)
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The article at the first link has good info and seems to explain everything rather well. The other link is the same TSP pamphlet I read earlier and is not as helpful.

Edited by user Saturday, August 8, 2020 3:10:26 PM(UTC)  | Reason: Not specified

DISCLAIMER: You read it on an open internet forum :)
Raoul  
#6 Posted : Sunday, August 9, 2020 3:19:00 AM(UTC)

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My buddy wanted to take it with him.
Everyone thought he was crazy and I was the only one who would help him with his scheme.
He transferred all his funds to me with the promise to put it in his casket.
And I did because I am an honorable guy.
I inclosed a check for the full amount.
Retired July 2011
ex-military  
#7 Posted : Monday, August 10, 2020 6:55:38 AM(UTC)
ex-military

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Originally Posted by: Raoul Go to Quoted Post
My buddy wanted to take it with him.
Everyone thought he was crazy and I was the only one who would help him with his scheme.
He transferred all his funds to me with the promise to put it in his casket.
And I did because I am an honorable guy.
I inclosed a check for the full amount.


IF this is true, all you did was give it to the State. Once that check is outstanding for 7-10 years (depending on the State) the bank will be forced to escheat the funds to the State as Unclaimed Property. (assuming you did it as a bank check or corporate check, not a check on your personal account)
Raoul  
#8 Posted : Monday, August 10, 2020 12:06:25 PM(UTC)

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It was a personal check or I could not have spent the money.

If the check gets cashed then its the zombie appacolpsye and an overdrawn bank account is the least of my worries.
Retired July 2011
ex-military  
#9 Posted : Tuesday, August 11, 2020 4:54:30 AM(UTC)
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Originally Posted by: Raoul Go to Quoted Post
It was a personal check or I could not have spent the money.

If the check gets cashed then its the zombie appacolpsye and an overdrawn bank account is the least of my worries.


So your checking account will never be correct again. That money is just going to sit there drawing interest for you forever. Good for you I guess.
roger.d  
#10 Posted : Tuesday, August 11, 2020 10:09:25 AM(UTC)
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ex-military, I think you are missing the joke.

http://jokes.edigg.com/L...oney_In_The_Coffin.shtml

https://www.family-times...stration/Promises/201980

Edited by user Tuesday, August 11, 2020 10:10:55 AM(UTC)  | Reason: Not specified

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