Q. After 27 years of diligent saving and investing, I’ve accumulated well over $1 million in my regular TSP account. I also have over $70,000 in my Roth TSP account, and that portion is growing quickly. By the time I retire, I expect my Roth TSP balance will account for around 10 percent of my entire TSP account balance. After I retire at the end of 2017 (at age 62) and before I begin collecting Social Security (at age 66 or 70), I want to convert a good portion of my regular TSP account to Roth assets. The problem is, as you know, that the TSP does not permit within-plan Roth conversions, so the conversion will have to occur within an IRA.
How can I best convert my regular TSP assets to Roth IRA assets while maintaining my TSP account?
A. I’m not endorsing your plan, which sounds questionable, at best, but you could request the distribution of most of your TSP balance and split the balance between Traditional and Roth IRA accounts at a discount broker. Then, you could transfer the traditional IRA money back into your TSP account. This will leave a little Roth TSP money in the account, but will get your most of the way there. I urge you to carefully consider whether this is worth the effort before you proceed, however. What do you expect to gain from the transaction?