Money Pilot Financial Advisor Podcast

When changing your Thrift Savings Plan (TSP) contributions. three dollar limits that apply The annual limit  is $20,500. This limit is to the combined total that you can contribute in 2022 to your Traditional and Roth TSP combined. This limit does not apply to Traditional TSP contributions made from combat pay. The next limit  is $6,500 on additional catchup contributions for those turning age 50 or older in 2022. So if that's you, can make total TSP contributions of up to $27,000. For military in a combat zone, your contributions toward the catch-up limit must be Roth. And you can't contribute toward the catch-up limit from incentive pay, special pay, or bonus pay.

The third limit  is the $61,000 Annual Addition. Its the total amount of all the contributions that can be made to your TSP a year. This limit is includes your employee contributions and for you BRS military and FERS civilians the Automatic 1% Contributions, and up to 4% Matching Contributions. It doesn't include catch-up contributions. The annual addition limit affects mostly our military service members who can contribute tax-exempt pay earned in a combat zone up to this  limit.

Next decide how much your can and want to contribute. Remember with ROTH TSP, you pay your income taxes now, up front on your contributions. So you will have less money paycheck each pay period when you contribute to ROTH TSP than if you contribute to Traditional TSP. YFor more info listen to Episode 28 Meet ROTH and Episode 30 To ROTH or Not to ROTH.

Civilian employees usually designate a dollar amount to contribute from each paycheck, while our service members will need to elect a percentage. FERS civilians and BRS military, in order to get your full match, you need must contribute at least 5% of your pay in every single pay period to get your full match. If you hit one of those limits before the end of the year, you give up that match from your pay for the rest of the year. Check out their online Elective Deferral Calculator .  You’ll need your most recent LES and guess how many pay periods it will take your personnel center to make the change to your pay. For Military and DoD civilians, MyPay says, it will be effective at the beginning of the next pay period. So enter 0 for this box. 

The calculator will give you the new amount you can contribute each remaining pay period if you want to maximize your contributions for 2022. Pick what you can afford, or that max number from the website, whichever is lower for your contribution.

Next use your electronic payroll system to change your TSP contributions. For  military service members and DoD civilians thats myPay. For other for federal employees there are other payroll systems, like Employee Express, EBIS/GRB, LiteBlue, and NFC EPP. 

Generally, feds will use enter the dollar amount and service members a percentage of your pay. Military can keep this simple by contributing from your base pay. Take the monthly TSP contribution you want to make, divided by your monthly base pay, times 100

Then go to myPay and log in. Under the “PAY CHANGES” heading, select the “Thrift Savings Plan (TSP)” link. Then click the yellow pencil icon to make a change to your TSP contribution. Enter your changes in the pop-up window. Enter that percentage in the base pay box for either Traditional TSP or ROTH TSP or split between both. There’s boxes to enter percentages for other pays  as well.

Then click Continue to review then Submit.

When changing your Thrift Savings Plan (TSP) contributions. three dollar limits that apply The annual limit  is $20,500. This limit is to the combined total that you can contribute in 2022 to your Traditional and Roth TSP combined. This limit does not apply to Traditional TSP contributions made from combat pay. The next limit  is $6,500 on additional catchup contributions for those turning age 50 or older in 2022. So if that's you, can make total TSP contributions of up to $27,000. For military in a combat zone, your contributions toward the catch-up limit must be Roth. And you can't contribute toward the catch-up limit from incentive pay, special pay, or bonus pay.

The third limit  is the $61,000 Annual Addition. Its the total amount of all the contributions that can be made to your TSP a year. This limit is includes your employee contributions and for you BRS military and FERS civilians the Automatic 1% Contributions, and up to 4% Matching Contributions. It doesn't include catch-up contributions. The annual addition limit affects mostly our military service members who can contribute tax-exempt pay earned in a combat zone up to this  limit.

Next decide how much your can and want to contribute. Remember with ROTH TSP, you pay your income taxes now, up front on your contributions. So you will have less money paycheck each pay period when you contribute to ROTH TSP than if you contribute to Traditional TSP. YFor more info listen to Episode 28 Meet ROTH and Episode 30 To ROTH or Not to ROTH.

Civilian employees usually designate a dollar amount to contribute from each paycheck, while our service members will need to elect a percentage. FERS civilians and BRS military, in order to get your full match, you need must contribute at least 5% of your pay in every single pay period to get your full match. If you hit one of those limits before the end of the year, you give up that match from your pay for the rest of the year. Check out their online Elective Deferral Calculator .  You’ll need your most recent LES and guess how many pay periods it will take your personnel center to make the change to your pay. For Military and DoD civilians, MyPay says, it will be effective at the beginning of the next pay period. So enter 0 for this box. 

The calculator will give you the new amount you can contribute each remaining pay period if you want to maximize your contributions for 2022. Pick what you can afford, or that max number from the website, whichever is lower for your contribution.

Next use your electronic payroll system to change your TSP contributions. For  military service members and DoD civilians thats myPay. For other for federal employees there are other payroll systems, like Employee Express, EBIS/GRB, LiteBlue, and NFC EPP. 

Generally, feds will use enter the dollar amount and service members a percentage of your pay. Military can keep this simple by contributing from your base pay. Take the monthly TSP contribution you want to make, divided by your monthly base pay, times 100

Then go to myPay and log in. Under the “PAY CHANGES” heading, select the “Thrift Savings Plan (TSP)” link. Then click the yellow pencil icon to make a change to your TSP contribution. Enter your changes in the pop-up window. Enter that percentage in the base pay box for either Traditional TSP or ROTH TSP or split between both. There’s boxes to enter percentages for other pays  as well.

Then click Continue to review then Submit.

Merry Christmas and welcome back to the podcast. I hope yo’ve a had a bit of a break to spend time with the ones you love. Here’s a special shout out to our military and civil servants that are spending another holiday far from home and family. We love you and we’re thinking of you. Thanks for being there for us.

Today’s podcast is a short one. It’s a time for rest, fun, and joy. So believe it or not today’s podcast is on how our military service members can change their income tax withholding and change your Servicemen's Group Life Insurance (SGLI). 

Whaaat? REALLY? Why? Who wants to think about this at Christmas. Especially if you’ve been in awhile you know almost any personnel action you have to do that’s related to your pay is a pain, can go bad fast, involves who knows what paperwork and chasing done the right person to hand it to.

So this Christmas, my gift to you is the ‘EASY” button for changing your SGLI and W4 withholding. It’s the Christmas miracle of military paperwork. If you are getting a big refund each year or a nasty tax surprise at filing time, you can instruct your employer to change your withholding amounts by filling out a new W4. I did an entire episode on the W4 Withholding form in Episode #40 Withholding. So refer back to that to see what information you need to update your withholding. And I’ll put a link in the show notes to the IRS Form W4 too. https://www.irs.gov/pub/irs-pdf/fw4.pdf

For our serving and retired military and DoD civilians it is, no kidding, easy. You log into your MyPay account at  https://mypay.dfas.mil/#/. The information you input directly on the MyPay website is the same as the W-4 form. On MyPay look for the Pay Changes category and under that you can chose federal withholding or state withholding. Fill in the blanks online and its all done online in a few minutes.

The other Christmas miracle easy task is changing your SGLi. Our serving military now can make changes to your SGLI online using the the SGLI On-Line Enrollment System (SOES). Go to MilConnect (link again in show notes) https://milconnect.dmdc.osd.mil/milconnect/ 

On the MilConnect main home page you’ll find front and center a “I want to…” section and Manage my SGLI is an easy to see choice. Once you click that button, you’ll be prompted to sign in with your DS login, your CAC card, or your DFAS myPay credentials. Your choice. You’ll se a ‘If you have had a life event” choice. If you’ve gotten married since you joined the military, or divorced, had children, or a previous beneficiary has passed, now is a good time to relook how much coverage you have and who you have listed as beneficiaries. You can change your amount of coverage and beneficiaries  all on-line, oh so easy.

And that’s it for today! If your end of year to-do list or New year’s resolution includes finally updating your income tax withholding or SGLI coverage. Hop on it. So quick and easy. A military Christmas miracle.

Merry Christmas and welcome back to the podcast. I hope yo’ve a had a bit of a break to spend time with the ones you love. Here’s a special shout out to our military and civil servants that are spending another holiday far from home and family. We love you and we’re thinking of you. Thanks for being there for us.

Today’s podcast is a short one. It’s a time for rest, fun, and joy. So believe it or not today’s podcast is on how our military service members can change their income tax withholding and change your Servicemen's Group Life Insurance (SGLI). 

Whaaat? REALLY? Why? Who wants to think about this at Christmas. Especially if you’ve been in awhile you know almost any personnel action you have to do that’s related to your pay is a pain, can go bad fast, involves who knows what paperwork and chasing done the right person to hand it to.

So this Christmas, my gift to you is the ‘EASY” button for changing your SGLI and W4 withholding. It’s the Christmas miracle of military paperwork. If you are getting a big refund each year or a nasty tax surprise at filing time, you can instruct your employer to change your withholding amounts by filling out a new W4. I did an entire episode on the W4 Withholding form in Episode #40 Withholding. So refer back to that to see what information you need to update your withholding. And I’ll put a link in the show notes to the IRS Form W4 too. https://www.irs.gov/pub/irs-pdf/fw4.pdf

For our serving and retired military and DoD civilians it is, no kidding, easy. You log into your MyPay account at  https://mypay.dfas.mil/#/. The information you input directly on the MyPay website is the same as the W-4 form. On MyPay look for the Pay Changes category and under that you can chose federal withholding or state withholding. Fill in the blanks online and its all done online in a few minutes.

The other Christmas miracle easy task is changing your SGLi. Our serving military now can make changes to your SGLI online using the the SGLI On-Line Enrollment System (SOES). Go to MilConnect (link again in show notes) https://milconnect.dmdc.osd.mil/milconnect/ 

On the MilConnect main home page you’ll find front and center a “I want to…” section and Manage my SGLI is an easy to see choice. Once you click that button, you’ll be prompted to sign in with your DS login, your CAC card, or your DFAS myPay credentials. Your choice. You’ll se a ‘If you have had a life event” choice. If you’ve gotten married since you joined the military, or divorced, had children, or a previous beneficiary has passed, now is a good time to relook how much coverage you have and who you have listed as beneficiaries. You can change your amount of coverage and beneficiaries  all on-line, oh so easy.

And that’s it for today! If your end of year to-do list or New year’s resolution includes finally updating your income tax withholding or SGLI coverage. Hop on it. So quick and easy. A military Christmas miracle.

If you have cash savings that you will not need for at least a year, consider investing in US Government I Series Savings Bonds. Check out the Treasury Direct information page for Series I Savings Bonds: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm#irate  The I Bonds you buy between now and April 22, 2022 will earn you at least 3 1/2 percent interest over 1 year. After that you should reevaluate and consider redeeming them if other cash savings rates are better.

The interest that the I Bonds pays has two parts. The first part is based on a bond interest rates when you purchase your bond . This interest is fixed for the life of the bonds which is 30 years, unless you sell it first. This fixed part rate for is now 0%. 

Now the second part is a floating interest-rate. So you know that if you invest now, that the first part is gonna be 0%. But the second, floating rate is based on inflation and changes every six months in November and April. We had an inflation spike in 2021 . Because of that recent spike in inflation the floating rate for bonds purchased through April 2022 is 7.12% annualized. What this means is for those first six months you'll earn 3.56% on your bond which is half of the annualized rate. Then the floating rate will change for the second six months. The floating rate could also drop to zero if there is no inflation. But even if that happens you would still have a total of 3.56% return for one year.

You can buy up to $10,000 in electronic I Bonds now for calendar year 2021 and up to another $10,000 for calendar year 2022 after January 1st. The bonds are backed by the federal government and it guarantees you will get you money back, plus the interest. You will pay federal income tax on the interest when you redeem the bond, but they are exempt from state tax. You cannot redeem I Bonds in the first year. And if you redeem within 5 years of purchase, you will forfeit the last 3 months of interest earned. The unusual combination of recent high inflation and low general interest rates make the return on I Bonds you purchase between now and the end of April 2022 a pretty good deal compared to other places you can stash your cash.

If you are interested, you buy electronic I Bonds directly from the US Treasury online for amounts from $25-$10,000. You purchase these online directly from the Treasury at https://www.treasurydirect.gov/global_open.htm  Each person can buy up to $10,000 in electronic I bonds each calendar year. To open an account you will need your drivers license, Social Security number, and bank routing and account numbers for the electronic transfer of funds and you can designate one beneficiary for your bond.

You can also buy I Bonds as a gift for someone else including minor children. That person would also have to have a treasury direct account. More information is here: https://www.treasurydirect.gov/indiv/planning/plan_gifts.htm

There are also paper I bonds they can only be purchased with a federal income tax refund. You can use up to $5000 of any refund on your federal taxes to purchase these paper Io bonds. More information at https://www.treasurydirect.gov/indiv/research/faq/faq_irstaxfeature.htm And this $5000 limit is in addition to the $10,000 a year electronic I Bond. You would need to file IRS form 8888 with your tax return to do that.

If you’d like more information on bonds in general, check out Episode 53 Bonds. And for an overview of paces to safely invest cash listen to Episode 39 Stash the Cash. Have a wonderful Christmas and we’ll talk again next week.

If you have cash savings that you will not need for at least a year, consider investing in US Government I Series Savings Bonds. Check out the Treasury Direct information page for Series I Savings Bonds: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm#irate  The I Bonds you buy between now and April 22, 2022 will earn you at least 3 1/2 percent interest over 1 year. After that you should reevaluate and consider redeeming them if other cash savings rates are better.

The interest that the I Bonds pays has two parts. The first part is based on a bond interest rates when you purchase your bond . This interest is fixed for the life of the bonds which is 30 years, unless you sell it first. This fixed part rate for is now 0%. 

Now the second part is a floating interest-rate. So you know that if you invest now, that the first part is gonna be 0%. But the second, floating rate is based on inflation and changes every six months in November and April. We had an inflation spike in 2021 . Because of that recent spike in inflation the floating rate for bonds purchased through April 2022 is 7.12% annualized. What this means is for those first six months you'll earn 3.56% on your bond which is half of the annualized rate. Then the floating rate will change for the second six months. The floating rate could also drop to zero if there is no inflation. But even if that happens you would still have a total of 3.56% return for one year.

You can buy up to $10,000 in electronic I Bonds now for calendar year 2021 and up to another $10,000 for calendar year 2022 after January 1st. The bonds are backed by the federal government and it guarantees you will get you money back, plus the interest. You will pay federal income tax on the interest when you redeem the bond, but they are exempt from state tax. You cannot redeem I Bonds in the first year. And if you redeem within 5 years of purchase, you will forfeit the last 3 months of interest earned. The unusual combination of recent high inflation and low general interest rates make the return on I Bonds you purchase between now and the end of April 2022 a pretty good deal compared to other places you can stash your cash.

If you are interested, you buy electronic I Bonds directly from the US Treasury online for amounts from $25-$10,000. You purchase these online directly from the Treasury at https://www.treasurydirect.gov/global_open.htm  Each person can buy up to $10,000 in electronic I bonds each calendar year. To open an account you will need your drivers license, Social Security number, and bank routing and account numbers for the electronic transfer of funds and you can designate one beneficiary for your bond.

You can also buy I Bonds as a gift for someone else including minor children. That person would also have to have a treasury direct account. More information is here: https://www.treasurydirect.gov/indiv/planning/plan_gifts.htm

There are also paper I bonds they can only be purchased with a federal income tax refund. You can use up to $5000 of any refund on your federal taxes to purchase these paper Io bonds. More information at https://www.treasurydirect.gov/indiv/research/faq/faq_irstaxfeature.htm And this $5000 limit is in addition to the $10,000 a year electronic I Bond. You would need to file IRS form 8888 with your tax return to do that.

If you’d like more information on bonds in general, check out Episode 53 Bonds. And for an overview of paces to safely invest cash listen to Episode 39 Stash the Cash. Have a wonderful Christmas and we’ll talk again next week.

Today's content comes directly from  Brian O'Neill’s recent blog post Top 10 TSP Quirks You Need to Know.  Brian is a fellow Military Financial Advisor Association member , former Air Force fighter pilot, and Certified Financial Planner who writes a great weekly blog with a fighter pilot twist. Thanks, Brian.

If you’ve ever compared the Thrift Savings Plan (TSP)  to a civilian 401(k), you probably noticed the TSP has quite a few quirks:

1. Minimum balance: As long as you leave at least $200 in your TSP when you seperate from service, you can keep your TSP account open.  This is great because you never know when a change in employment or the tax law will make it advantageous to roll money into the TSP. 

2. Accepts rollovers: Except for a Roth IRA dollars, you can roll a Traditional IRA, and most other employer plan (e.g., 401(k)) funds into the TSP.  This can be great for simplifying your roster of retirement accounts.
3. Three Withdrawal options after separation:
Fixed or life-expectancy-based installment payments. For installments of less than 10 years, you can rollover the distributions to an IRA.  Single withdrawal: The minimum is $1,000 and you can only do one every 30 days.  Purchase an annuity. This locks in a fixed stream of payments for life, but you forfeit any right to leave the annuity balance to your heirs.

 4. Roth or Traditional withdrawals: You can choose Roth, Traditional or pro-rata withdrawals.  If you have contributions from a combat zone, your contribution is not taxable but the earnings are. Withdrawals from your Traditional balance will always be pro-rata from pre-tax and after-tax dollars.

 5. Processing delays.  Along with the military and civil service human resource bureaucracy delays, the TSP can be pretty slow processing any request.  Plan ahead, it’s not an ATM.

6. Spouse rights. If you choose to receive your TSP as a separately-purchased annuity, your spouse will need to consent to anything other than a 50% survivorship feature.

7. Death Treatment: Your balance will go to your beneficiaries on file with TSP, and NOT according to your will. And you must use form TSP-3 to change the d default beneficiaries.  A surviviing spouse's TSP account is automatically invested in an age-determined Lifecycle Fund. A non-spouse beneficiary can't keep the TSP account and will need to receive the funds in an Inherited IRA. If your beneficiary then dies, the TSP will pay the balance directly to that beneficiary’s beneficiary allot once, potentially creating a “tax bomb.”  If you inherit a TSP account, roll it to an Inherited IRA so a successor beneficiary keeps the tax-advantaged status.

8. The G-Fund. The G-Fund invests in special government bonds that its guaranteed to never lose principal value. But the G-Fund is usually the lowest performer of the 5 core TSP funds.  It can make sense as part of a portfolio, but usually is  NOT all.

9. Withdrawals are pro-rata from all funds. You can’t take a distribution from only the G-Fund or C-Fund, for example. A withdrawal is pro-rata across all them.  For a work around  after your withdrawal comes out, log into TSP and rebalance your funds to the allocation you want to keep. 

10. Roth RMDs. A Roth IRA does not have a Required Minimum Distribution (RMD).  Traditional IRAs, 401(k)s, and the both Roth and Traditional TSP all require you to start taking RMD every year starting age 72. Evaluate moving of Roth TSP dollars into a Roth IRA prior to 72.

Today's content comes directly from  Brian O'Neill’s recent blog post Top 10 TSP Quirks You Need to Know.  Brian is a fellow Military Financial Advisor Association member , former Air Force fighter pilot, and Certified Financial Planner who writes a great weekly blog with a fighter pilot twist. Thanks, Brian.

If you’ve ever compared the Thrift Savings Plan (TSP)  to a civilian 401(k), you probably noticed the TSP has quite a few quirks:

1. Minimum balance: As long as you leave at least $200 in your TSP when you seperate from service, you can keep your TSP account open.  This is great because you never know when a change in employment or the tax law will make it advantageous to roll money into the TSP. 

2. Accepts rollovers: Except for a Roth IRA dollars, you can roll a Traditional IRA, and most other employer plan (e.g., 401(k)) funds into the TSP.  This can be great for simplifying your roster of retirement accounts.
3. Three Withdrawal options after separation:
Fixed or life-expectancy-based installment payments. For installments of less than 10 years, you can rollover the distributions to an IRA.  Single withdrawal: The minimum is $1,000 and you can only do one every 30 days.  Purchase an annuity. This locks in a fixed stream of payments for life, but you forfeit any right to leave the annuity balance to your heirs.

 4. Roth or Traditional withdrawals: You can choose Roth, Traditional or pro-rata withdrawals.  If you have contributions from a combat zone, your contribution is not taxable but the earnings are. Withdrawals from your Traditional balance will always be pro-rata from pre-tax and after-tax dollars.

 5. Processing delays.  Along with the military and civil service human resource bureaucracy delays, the TSP can be pretty slow processing any request.  Plan ahead, it’s not an ATM.

6. Spouse rights. If you choose to receive your TSP as a separately-purchased annuity, your spouse will need to consent to anything other than a 50% survivorship feature.

7. Death Treatment: Your balance will go to your beneficiaries on file with TSP, and NOT according to your will. And you must use form TSP-3 to change the d default beneficiaries.  A surviviing spouse's TSP account is automatically invested in an age-determined Lifecycle Fund. A non-spouse beneficiary can't keep the TSP account and will need to receive the funds in an Inherited IRA. If your beneficiary then dies, the TSP will pay the balance directly to that beneficiary’s beneficiary allot once, potentially creating a “tax bomb.”  If you inherit a TSP account, roll it to an Inherited IRA so a successor beneficiary keeps the tax-advantaged status.

8. The G-Fund. The G-Fund invests in special government bonds that its guaranteed to never lose principal value. But the G-Fund is usually the lowest performer of the 5 core TSP funds.  It can make sense as part of a portfolio, but usually is  NOT all.

9. Withdrawals are pro-rata from all funds. You can’t take a distribution from only the G-Fund or C-Fund, for example. A withdrawal is pro-rata across all them.  For a work around  after your withdrawal comes out, log into TSP and rebalance your funds to the allocation you want to keep. 

10. Roth RMDs. A Roth IRA does not have a Required Minimum Distribution (RMD).  Traditional IRAs, 401(k)s, and the both Roth and Traditional TSP all require you to start taking RMD every year starting age 72. Evaluate moving of Roth TSP dollars into a Roth IRA prior to 72.

For you military and federal employees out there, TSP has a detailed notice that provides great info and includes a chart and explanation of how to calculate your RMD yourself. I’ll put a link in the show notes https://www.tsp.gov/publications/tsp-775.pdf 

The simplest way to calculate an RMD is to go to investor.gov's online RMD calculator https://www.investor.gov/financial-tools-calculators/calculators/required-minimum-distribution-calculator 

You need two key pieces of information. How old will you be on December 31st and what was the value of your Traditional TSP, 401k, and/or IRA at the end of last year. Hopefully, figuring out how old you will be at the end this year is pretty easy. To find the value of your account at the end of last year, pull up your end of year statement.

The main thing to remember about RMDs is that they are mandatory for Traditional IRAs, Traditional TSP, and Traditional 401k. RMDs now start at age 72 and must be taken every year. The dollar amounts are dictate by the IRS. RMDs are taxable income. And There is a very stiff penalty if you don’t take the full required distributions. So you lose a certain amount of control over how much and when those retirement savings are taxed. This may not be a big concern if those RMDs don’t push you into higher income tax bracket. 

But if they will push you into a higher tax bracket, there are some strategies you can consider to minimize the tax impact. You could work past age 72, contribute to ROTH retirement accounts now instead of Traditional accounts, and do ROTH conversions is years you have lower income (like between stopping working and receiving social security or a pension). Just remember with ROTH accounts you must pay the income tax upfront for the benefit of tax-free withdrawal later. And don’t delay your very first RMD into the second year if that will push you into a higher tax bracket.

Also you can take your total RMDs for several IRAs from just one of the IRAs. But you can’t do that with other retirement accounts, like the TSP or 401k. And each spouse must take RMDs from their own retirement accounts, even if you file jointly.

For you military and federal employees out there, TSP has a detailed notice that provides great info and includes a chart and explanation of how to calculate your RMD yourself. I’ll put a link in the show notes https://www.tsp.gov/publications/tsp-775.pdf 

The simplest way to calculate an RMD is to go to investor.gov's online RMD calculator https://www.investor.gov/financial-tools-calculators/calculators/required-minimum-distribution-calculator 

You need two key pieces of information. How old will you be on December 31st and what was the value of your Traditional TSP, 401k, and/or IRA at the end of last year. Hopefully, figuring out how old you will be at the end this year is pretty easy. To find the value of your account at the end of last year, pull up your end of year statement.

The main thing to remember about RMDs is that they are mandatory for Traditional IRAs, Traditional TSP, and Traditional 401k. RMDs now start at age 72 and must be taken every year. The dollar amounts are dictate by the IRS. RMDs are taxable income. And There is a very stiff penalty if you don’t take the full required distributions. So you lose a certain amount of control over how much and when those retirement savings are taxed. This may not be a big concern if those RMDs don’t push you into higher income tax bracket. 

But if they will push you into a higher tax bracket, there are some strategies you can consider to minimize the tax impact. You could work past age 72, contribute to ROTH retirement accounts now instead of Traditional accounts, and do ROTH conversions is years you have lower income (like between stopping working and receiving social security or a pension). Just remember with ROTH accounts you must pay the income tax upfront for the benefit of tax-free withdrawal later. And don’t delay your very first RMD into the second year if that will push you into a higher tax bracket.

Also you can take your total RMDs for several IRAs from just one of the IRAs. But you can’t do that with other retirement accounts, like the TSP or 401k. And each spouse must take RMDs from their own retirement accounts, even if you file jointly.