Penalty for transferring back into TSP


Q. Three years ago, I let myself be persuaded to withdraw 50 percent of my Thrift Savings Plan and place it in a private qualified retirement account. I did this at age 61, and this was my one-time withdrawal, so there were no penalties.

I regret doing this. Before I retire, can I transfer this money back into my TSP without any issues?

The other option is to use this private account to purchase a fixed annuity and draw off of it during the first years of my retirement thus leaving the other half of my savings (in Thrift) alone to continue to build.  Recommendations?

A. You may transfer the money back into your TSP account any time, subject to any restrictions imposed by the source retirement plan. As I’ve written many times: Absent any compelling reason to the contrary, you should maximize your use of the TSP for retirement saving and investing.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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