Tsp to IRA?

[Anonymous]

Do I have this right...if my children inherit my tsp they have 90 days to liquidate it and pay taxes on it. If I roll it over I to sn IRA they will have 10 years to liquidate it and pay the taxes?

[Anonymous]

Not quite right. Yes they have 90 days to transfer the money to an inherited IRA account they would need to set up. They would have 10 years to liquidate that account. Otherwise on day 91 they will be sent a check.

See TSP guidance here https://www.tsp.gov/publications/tspbk31.pdf

TSP will automatically set up a beneficiary account for a spouse.

[Anonymous]

Thank you! That makes things easier/better

[Anonymous]

But if a spouse with a beneficiary account dies then the next beneficiary has to withdraw it all immediately.

So if Larla has a TSP and dies if her spouse Larlo is the beneficiary her spouse can either keep the money in TSP indefinitely or roll it over to an inherited IRA. If instead her son Eagle is the beneficiary he can roll it over to an inherited IRA within 90 days.

However Larlo may want to consider rolling it into an IRA because if Larlo keeps the money in TSP and then dies and leaves it to Eagle, Eagle has to take all the money out at once.

[Anonymous]

What if Larla and Larlo have a trust. First beneficiary is spouse. Second beneficiary is trust (with kids as beneficiary of trust)