Can You Transfer the TSP to a Private 401k?

You can generally rollover plan balances, or even part of a plan balance, from a Thrift Savings Plan, IRA, 401k or other plan to another eligible plan. Rollovers can go directly from one plan to another, or you may be the intermediary, actually taking constructive receipt of the money before forwarding it to the new plan. However, not every plan is eligible to rollover to every other plan.

General Rules

Broadly speaking, TSP accounts are subject to the same rollover rules and provisions that govern other tax-deferred retirement plans, including traditional IRAs and 401k plans. If you have an old TSP balance and you are now covered under a new employer's 401k, you can generally roll the balance over. You can also generally roll a TSP account over to a traditional IRA account.

Tax Consequences

There are normally no tax consequences involved in rolling a TSP balance over to a 401k or other retirement plan. The IRS does not consider you to be in constructive receipt of the money. However, if you take the money directly, you only have 60 days to complete the transfer to your new 401k or you could be charged interest and penalties.

Roth Accounts

The specific rollover rules depend on whether your TSP plan is a Roth account or a traditional TSP account. Congress authorized Roth TSP accounts beginning in 2012. These are not tax-deferred accounts. You have already paid the taxes on Roth accounts. Roth accounts cannot generally be rolled over into anything but a Roth IRA or a Roth 401k designated account if your company has them.

Special Considerations

To make a withdrawal or transfer out of your TSP account, you must request it in writing by filling out a Form TSP 70 (for a full withdrawal) or a Form TSP 77 (for a partial withdrawal), and your signature must be notarized. You must also have your spouse sign off on the request if you are a FERS employee or uniformed services member.

Photo Credits

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.