Starting a 72t using TSP

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L1: Starting a 72t using TSP
I am 55. I began receiving small monthly distributions from my TSP 2 years ago and just paying the penalty. I would now like to receive more money every month so I want to begin a 72t plan using the TSP’s age-based distribution method. Will the IRS allow this considering have I already started receiving non-72t distributions from TSP?
2018-04-15 08:02, By: Gunny, IP: [173.187.62.51]

L2: Starting a 72t using TSP
Gunny – it will be interesting to see what other’s say. I am under the impression that for you to do the 72(t), you have to use an account that you will not do any other transactions besides the 72(t) SEPP. You can’t add to the account or take out any other additional money. IF you do, you will bust the 72(t). That SEPP account can’t be touched while the SEPP is taking place and you reach 59.5. You have to take no less that 5 annual payments in your case. An expert opinion is probably needed for more nuance.
2018-04-15 22:25, By: Rickyrod1, IP: [71.41.252.34]

L3: Starting a 72t using TSP
Rickyrod1 is absolutely right, the SEPP plan must stand on it’s own… no additions and no withdrawals other than the calculated SEPP payment.
Not really sure what the “TSP’s age-based distribution method” is, but if it meets one of the three calculation methods that are SEPP approved, it should be Ok. But remember,no additions and no withdrawals other than the calculated SEPP payment.
2018-04-15 23:12, By: Gfw, IP: [216.80.120.234]

L4: Starting a 72t using TSP
The TSP has all kinds of conditions for post separation distributions. You can only change the amount of your monthly installment distributions one time per year. Therefore, the earliest you could start a SEPP plan form the TSP is next January. And even to do that you would have to determine a plan balance after the last monthly distribution you are getting now, determine your SEPP distribution and start the new distributions in January. Given the speed at which the TSP moves, I would avoid the risks involved here.
Instead, I would leave maybe 10k in the TSP, do a partial direct rollover of the remaining balance and implement your plan from your rollover IRA. After your plan is over, if you wish you can probably roll your IRA back into the TSP.
And if you have a Roth TSP balance with your pre tax TSP, there might be additional problems. The TSP has recently announced reduced restrictions for distributions, but actually implementing these changes may take more time than you have. So the IRA rollover is your best bet.
2018-04-16 00:41, By: Alan S, IP: [24.117.172.15]