No Lifetime RMD

The Roth TSP allows federal employees and military service members to save for retirement on a tax-free basis. One of the key benefits of the Roth TSP is that there are no lifetime required minimum distributions (RMDs), meaning retirees can let their savings grow indefinitely without being forced to withdraw funds and pay taxes on them. This is a stark contrast to traditional retirement accounts, such as IRAs and 401(k)s, which do have lifetime RMDs.

For current federal employees and military service members, this means they have a unique opportunity to maximize their tax-free retirement savings and potentially pass on wealth to future generations, all without worrying about taking RMDs.

For future federal retirees, the elimination of lifetime RMDs for Roth TSP participants may lead to an increased interest in the Roth option and a shift away from traditional accounts, as retirees seek to take advantage of the tax-free growth potential and avoid required distributions later in life.

Overall, the ramifications of no lifetime RMDs for Roth TSP participants are significant and should be carefully considered by anyone saving for retirement within the federal government or military.