What Is a Thrift Savings Account Rollover?

The Thrift Savings Plan is the government's version of a 401(k) plan combined with an individual retirement account. A rollover is a transfer of funds between tax-deferred retirement accounts, unlike a regular withdrawal that may be taxable. Anyone with a current TSP account can roll over money from outside plans into the TSP. You can also roll over balances out of your TSP account once you leave federal government or military service.

Rollover vs. Transfer

The difference here is whether or not the individual investor touches the funds. A rollover involves the original financial institution releasing the funds to you, which you then deposit in the new retirement account. You have 60 days to make the deposit before you're liable for taxes and a possible penalty for early withdrawal. With a transfer or "direct rollover," the funds go from the old financial institution to the new one without triggering a tax event.


If you're a new federal employee, you can consolidate a limited number of other retirement accounts into the TSP system. TSP's administrative fees are lower than those of other asset managers, but you'll have more flexibility in another retirement savings program. However, if you stay with the federal government until retirement, keeping all your retirement accounts in one place makes sense.

Rolling In

You can roll over outside funds into any established TSP account. Funds from traditional IRAs or 401(k) plans will be placed into a separate account from Roth transfers to preserve the tax status of the contributions. The TSP won't accept Roth funds directly from a participant, so you'll need to do a direct transfer. Use form TSP-60 for a traditional rollover and form TSP-60-R for a Roth transfer.

Rolling Out

Your agency or branch of service must verify your separation from the federal government or military before TSP will allow a rollover or transfer. You can then roll over any or all of the account balance into a new retirement savings program. Pre-tax money may be placed in a traditional IRA, while post-tax balances can go into a Roth. Your new employer may let you bring former TSP funds into its retirement plan. Check with your human resources department for details.

Transfer Out

Check with the new financial institution for the necessary forms and paperwork to do a rollover or direct transfer. Otherwise, file form TSP-70 to make a withdrawal or direct the funds to a new financial institution. It may take several weeks for the TSP to process either request.

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