Q: Because of the limited ability to withdraw TSP funds in a totally efficient manner for me, I am considering rolling my TSP account to Vanguard in two years when I retire. Vanguard provides the ability to withdraw Roth funds separate from 401k funds in any amounts I desire. As I understand, TSP requires withdraws to be equally prorated between 401k and Roth, based on the total balance.
How does a TSP transfer occur … are the TSP Roth funds moved to a Vanguard rollover Roth fund and the TSP 401k funds placed in a taxable rollover account? It seems to me that somehow these funds need separated.
I’d like to be able to manage and vary the amounts I withdraw from each of the Roth and 401K accounts for tax purposes. TSP does not allow this ability, Vanguard does. Am I considering this matter correctly?
A: If you’ll take a look at form TSP-70 (https://www.tsp.gov/PDF/formspubs/tsp-70.pdf), you’ll see that you may direct the Roth portion to a Roth IRA and the Traditional portion to an IRA account.