setting up 72t

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L1: setting up 72t
Ok, so now I have to setup a 72t. I am retiring 12/31/11 from Federal Government employment. I have a TSP (thrift savings plan) account. I expect that my balance will be $365,000 when I retire.
I will be 51 on 1/7/12 and my husband will be 63. My last 12 months of earning in my TSP are at 11.32%, but I just moved it all into a very safe and conservative fund that earned 2.81% 2010, 2.97% 2009 and so far this year 2011 it has earned 2.65%.
So when I use the calculator what do I input to maximize my monthly payments starting at age 51 to age 59 1/2
amoritization or minimum distribution or annuitization?
reasonable interest rate?
actual investment rate?
joint calculator or not?
I want to maximize my monthly payments
2011-08-04 16:40, By: atctina, IP: []

L2: setting up 72t
Recommend you review the planning pointers available under the second tab from the top on the list at the left.
Highest dollar calculation for a given account balance will result from using the amortization method, highest interest rate for either of the two months prior to your first distribution month and individual calculation (not
Your account balance cannot be based on a date earlier than the date that all the TSP assets arrive in your rollover IRA. You could use a later balance up the date you order your first distribution if you plan to start the 72t
right after the rollover is complete.
The actual investment rate is only used to illustrate how your IRA balance would change based on your entry of an arbitrary return. It does NOT affect the actual 72t calculated distribution.
Note: Your recent change to a very conservative investment option looks well timed under the current meltdown conditions.

2011-08-04 19:23, By: Alan S., IP: []

L2: setting up 72t
Congratulations for accumulating the balance you have in your TSP.As a retired USAF Navigator, thanks for your service as a controller. Believe me that with the severe weather we have in the mid-west, I appreciate the flexibility and close working relationship
I enjoyed with ATC.
Now to SEPP Plans and TSP. I have worked very closely with retiring TSP participants in Georgia for the last 19+ years so I’m very familiar with the nuiances associated with trying to set up a SEPP Plan using the TSP account. It’s a nightmare and not recommended!
Please process a “truste-to-trustee transfer” to a Rollover IRA account and then set up your distributions. Since you plan to retire on 12-31-2011 you will have ample time to learn how to set up and run a compliant SEPP Plan. Remember that you
MUST be separated from service for 31 days before you process
ANY paperwork to transfer your TSP. If you sign the Form TSP-70 before expiration of the 31 days it will “kick-back” and you will have to process new forms.
Read the FAQ’s found on this site as a starting point for your research. Use the forms found here to document your plan. You can also buy Bill Stecker’s book … also available on this site … as the best reference for SEPP Plans.
Recently I wrote some pointers about using … or not using … TSP to fund a SEPP Plan. I am going to turn it into a FAQ for the site, but until then I’ll paste it into this response. I think it will be helpful:

Thrift Savings Plan [TSP] Substantially Equal Periodic Payments [SEPP] Problems

Establishing a SEEP using your TSP account may lead to future problems.
Refer to Form TSP-70 (2/2010) Page 2 for the instructions, and look for the appropriate section for withdrawals. You will notice the following:
Problem #1: Periodic distributions areMonthly Only!
Problem #2: Only One Change Per Year is allowed. So much for being able to correct errors. If you did process a second form for the
“lump sum” then you bust the plan by taking out excess.
Problem #3: The Mandatory 20% Withholding on all distributions speaks for itself!
Problem #4: Unless you are real lucky, when you round to the nearest dollar for monthly distributions, 12 times the monthly distribution will exceed the allowed SEPP annual $1.00 variance.
Forms as of February 2010 TSP-70 for Civilians)

One last thought from an investment point of view. While the G-Fund is a great place to be today (08-09-2011), it will not sustain you throughout your entire retirement years. Remember that your normal life expectancy is about 30-years away. Plan on setting
up a sustainable, diversified investment plan.
Good luck.
Jim F
2011-08-09 16:17, By: Jim F, IP: []