Thrift Savings Plan (TSP) participants who have eligible retirement plans like a 401(k), 403(b), or a traditional IRA can roll the money from those funds into their TSP account. You have the flexibility to make this move while you’re still working or after retirement.
Consolidating your retirement savings in the TSP makes them easier to manage and allows you to take advantage of the TSP’s low fees. An added benefit to boosting your TSP balance is those funds are available should you meet the requirements to take out TSP loans or make hardship withdrawals during your working years.
Eligible Accounts
The TSP allows direct and indirect rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, and eligible employer plans such as a 401(k) or 403(b), into the traditional balance of your account.
The TSP will only allow direct rollovers of Roth distributions from Roth 401(k)s, Roth 403(b)s, and Roth 457(b)s into the Roth balance of your account. If you don’t have a Roth TSP balance the rollover will automatically create one.
Direct vs. Indirect Rollovers
A direct rollover is when all or part of your money from an eligible employer plan or IRA is sent directly to your TSP account. The main advantage of a direct rollover is that the funds are not taxed as income at the time of the rollover.
In an indirect rollover, the money from an eligible retirement plan is sent to you first and you have 60 days to complete the rollover. Keep in mind that, if you choose an indirect rollover, the funds are subject to federal income taxes.
Moving Money Into Your TSP
One option is to contact the ThriftLine and follow the prompts to connect with the TSP Rollover Concierge Service. They will then reach out to the administrators of the account you’re rolling over to the TSP and process the paperwork. If any signatures are required, they’ll handle that, too.
For those who are tech-savvy, log in to “My Account,” and once you’re logged in, you can use the online tool to follow the rollover steps and guidelines. Be sure to contact the provider of your eligible plan and request a rollover to your TSP then send any required documentation or rollover checks to the TSP.
For more information, connect with an FRC® trained advisor who can guide you through the process and make sure you’re on the right track for a successful retirement.
