The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. It was established by Congress in the Federal Employees’ Retirement System Act of 1986 and offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
Federal employees and retirees are encouraged to be familiar with and understand the rollover rules that apply to traditional IRAs, Roth IRAs, the TSP and other qualified retirement accounts. In particular, being aware which retirement account can and cannot be rolled over, deadlines for rollovers and when a direct transfer (“trustee-to ...
SEE ALSO: TSP Fixed Payment Option (Part 1); TSP Withdrawal Payments Based on Life Expectancy (Part 2); TSP Annuity (Part 3); This column will discuss the TSP rollover option of a separated participant’s TSP account to an IRA or to an eligible employer-sponsored retirement plan.. An eligible employer-sponsored retirement plan includes a 401(k) plan, a profit-sharing plan, a 403(b) tax ...
The TSP will accept into the Roth balance of your TSP transfers from Roth 401(k)s, Roth 403(b)s and Roth 457(b)s—but you can't indirectly rollover Roth funds into your TSP, and you can't move money from a Roth IRA into your TSP account. If you don't already have a Roth balance in your existing TSP account, the transfer will create one.
Simple process – You can initiate the transfer through your TSP account management portal. ³; Indirect Rollover (60-Day Rule Applies) With an indirect rollover, the TSP funds are first distributed to you, and you have 60 days to deposit the full amount into another qualified retirement plan or IRA. Important points to note:
To roll money into the Thrift Savings Plan, you would use form TSP 60 for rollovers into your traditional balance and form TSP 60-R for rollovers into your Roth balance.
Also, make sure to have a new account number at the the new destination. A participant’s financial institution or plan administrator must certify that the plan will accept the funds from the TSP. The TSP will not accept the rollover forms of other financial institutions or plans. Helpful Thrift Savings Plan Resources
The Thrift Savings Plan will accept transfers and rollovers from qualified plans like a 401(k) or IRA, even if the participant is no longer in Federal service.See Form TSP-60 (traditional TSP) and Form TSP-60-R (for Roth TSP) for precisely which plans are eligible for the TSP and Roth TSP. Although the TSP will allow a transfer from a Roth 401(k) into a Roth TSP, the TSP cannot accept ...
The Thrift Savings Plan withheld $20,000 (20%) from the distribution, and Bob received a check for $80,000. a) Now, If Bob only deposits the $80,000 into his IRA and doesn’t come up with the $20,000 withheld, he will be required to report the following: $20,000 as taxable income, $80,000 as a nontaxable rollover, and $20,000 as taxes paid.
TSP Rollovers: Options for Moving Your Funds into an IRA. A common strategy for those who want to potentially improve their investment results and gain greater flexibility is a TSP rollover to an IRA. This option lets you move your TSP balance into an Individual Retirement Account (IRA), which can offer additional investment choices and ...
When rollovers began, and until the mid-1990s, as long as the money that was withdrawn from the TSP (or other tax advantaged account, such as an IRA) was rolled into another tax advantaged account ...
Before the TSP accepts a rollover into a participant’s account, the administrator of the qualified retirement plan or the trustee or custodian of the conduit IRA must certify that the ...
Direct Rollovers: Funds are transferred directly from your eligible retirement plan or IRA to your TSP account, bypassing taxation at the time of rollover. Indirect Rollovers: You receive the funds from your retirement plan, and then you transfer them to your TSP account within a specified timeframe (usually 60 days). While this option provides ...
Make sure to have your TSP account information handy. You’ll want to have your account number and tax status (either traditional or Roth) before you begin. Step 2: Choosing the Right Retirement Account for the Rollover. Many TSP savers who choose to roll over their accounts end up transferring their funds to an individual retirement account ...
Another TSP Fact Sheet, titled Rollovers from the Thrift Savings Plan to Eligible Retirement Plans, provides information about moving TSP Funds to other eligible retirement accounts such as an IRA ...
It is therefore important that TSP participants, in particular those who will be retiring starting this year (and employees over age 59.5 who can request “age-based” TSP rollovers to IRAs), to be aware of the new SEC rollover rules and how the new rules will affect them with respect to their TSP accounts.
The rollover process is tax-free, and it allows you to continue to grow your retirement savings in a tax-deferred account. 2. TSP rollover rules and regulations. To transfer your TSP account, you need to follow some rules and regulations. First, you must have a balance of at least $200 in your TSP account to be eligible for a rollover.
When it comes to rolling money into the Thrift Savings Plan, there are several rules and regulations to follow. Both the Traditional TSP and the Roth TSP have their own set of rules as to what is allowed to be rolled over and what is not allowed. ... you can roll money into your TSP account either as an employee or after you have separated from ...
