TSP withdrawal into an IRA

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Q: I’m currently contributing to the 2050L fund of the Thrift Savings Plan. Is it possible to transfer my TSP funds to a Roth individual retirement account without getting penalized?  I don’t want to touch the money, I just want to invest in precious metals instead of Fortune 500 companies and small businesses.

A: If you are age 59 1/2 or older, you may take one age-based in-service withdrawal from your TSP account. Check with a CPA (ideally, the one who will be preparing your tax return for the year) for advice on converting it to a Roth IRA.

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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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

2 Comments

  1. Even if you could move the TSP to a Roth IRA, you’d also be hit with a tax bite. Why not just open and fund a Roth IRA now? If you can’t afford to, your next option is to lower your TSP contribution to allow you to fund your Roth IRA. Your best option however is max out your TSP and IRA every year and re-think this what is likely a fool’s gold investing scheme.

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