Q. I am a 54-year-old federal worker with a sizeable TSP account balance. My 26-year-old daughter, also a federal worker, invests regularly in the TSP. If I leave my daughter my TSP after I die, is she allowed to transfer the inherited portion of the TSP into her own TSP account? If so, is the inherited TSP money treated the same as her TSP contributions? If not, how so?
A. Under current law, she is not allowed to combine the inherited funds with her TSP account. The funds will be transferred into a beneficiary IRA, which can’t be combined with any other IRA, since the rules for distributing its contents are unique.
