Five-year rule


Q. I’m 68 years old (under FERS) and have a Roth IRA that’s external to the Thrift Savings Plan and has been open and funded for more than 10 years. I started contributing to my TSP Roth IRA this year. When I retire in 2015, I want to be able to roll over my TSP Roth IRA into my external Roth IRA without any tax consequences.  I understand that I’ve clearly met the age requirement (older than 59½), but I want to make sure I also meet the five-year rule.

Does the five-year rule apply to the time that funds were first contributed to the TSP Roth IRA or to the time that I first starting contributing to my external Roth IRA? In other words, I will only have contributed to my TSP Roth IRA for two years (not five) but will be transferring the funds into an external Roth IRA that’s been open for 10 years. Would that create any type of problem?

A. The five-year clock started running on Jan. 1 of the year in which you made your first Roth IRA contribution, so there should be no penalty on withdrawals from either the original IRA or the rolled-over money. The rules are complex, however, and your tax preparer should oversee any moves you make.


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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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