The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 changed the rules for taking distributions from retirement accounts inherited after 2019. The so-called 10-year rule generally requires inherited accounts to be emptied within 10 years of the original owner’s death, with some exceptions. Where an exception applies, the entire account must generally be emptied within 10 years of the beneficiary’s death, or within 10 years after a minor child beneficiary reaches age 21. This reduces the ability of most beneficiaries to spread out, or “stretch,” distributions from an inherited defined contribution plan or an IRA.
In February 2022, the IRS issued proposed regulations (generally appl
Federal Employee TSP (Thrift Savings Plan) Alert: The Winds of Change are Blowing
The Thrift Savings Plan has been evolving and changing since its inception in 1987. Anytime major shifts happen they are accompanied by a great deal of noise, not unlike the tectonic plates shifting and settling as announced by the provincial upheaval of earthquakes and tsunamis.
Fortunately, TSP shifts are not quite as dramatic as earthquakes, despite the noise!
The first thing to note is there will be a period in which no changes can be made to your TSP account while these updates are implemented. This is known as a “Blackout Period,” and is quite common with 401k’s, 403b’s, and other employer sponsored defined contribution plans.