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- The One Thing TSP Millionaires Regret After Age 73
The One Thing TSP Millionaires Regret After Age 73
They did everything right... until this sneaky rule cost them thousands each year.
You worked hard, contributed faithfully to your Thrift Savings Plan, and watched your balance climb into seven figures.
You're a TSP success story — the kind most federal employees admire.
But there's a bitter truth most TSP millionaires only discover after turning 73:
The IRS starts treating your success like a tax buffet.
And the regret?
They could’ve done something about it… but didn’t.
Once you turn 73, the IRS requires you to start taking Required Minimum Distributions (RMDs) from your TSP or traditional IRA accounts — whether you need the money or not.
And here’s the kicker:
Those RMDs are fully taxable as income.
They can push you into a higher tax bracket — sometimes even higher than when you were working.
They may trigger Medicare IRMAA surcharges and cause more of your Social Security to be taxed.
And once RMDs start… you can’t stop them.
Imagine withdrawing $50,000 a year just to meet RMD rules — and watching the IRS take a bigger bite than expected.
Case in Point:
Meet "James", a retired federal employee with $1.1M in his TSP at age 73.
He expected to coast through retirement on his savings — until RMDs added $44,800 in taxable income, bumping him:
Into a higher federal tax bracket
Over the Medicare surcharge threshold
And increased his taxes on Social Security
He called it a “triple tax surprise.”
And it cost him over $6,000 extra in that first year alone.
What James Could’ve Done Instead (And You Still Can)
The good news?
You may still have time to reduce or avoid this trap — before age 73.
Smart federal retirees use strategies like:
Strategic Roth conversions in low-income years
FERS bridge planning to manage taxable income before Social Security kicks in
Qualified Charitable Distributions (QCDs) to offset RMDs with tax-free giving
And withdrawal sequencing to flatten out tax bumps over time
These moves can help smooth your tax burden and extend the life of your TSP.
Final Thought
TSP millionaires don’t regret saving — they regret not planning the exit.
You earned your wealth. Let’s make sure you keep it.
Best,
Federal Wealth Retirement