Your TSP account is a portable retirement benefit. This means that when you make a full or partial withdrawal of your account after you leave service, you can have the TSP transfer part or all of your single payment or certain monthly payments to an IRA or an eligible employer plan (for example, the 401(k) plan of a new employer). Check with your new employer to see if its plan can accept your transfer. Amounts transferred will retain their tax-deferred status until you withdraw your money.
If you choose to have the TSP transfer all or a portion of your single payment or partial withdrawal, you can direct the transfer to only one IRA account or eligible employer plan. The amount not transferred will be paid directly to you unless you have chosen to have that amount sent electronically to your checking or savings account by direct deposit.
If you choose to have the TSP transfer your monthly payments to an IRA or an eligible employer plan, the TSP can only transfer monthly payments that are expected to last less than 10 years and are not based on the IRS life expectancy table. Thus, if you choose a dollar amount for your monthly
payments, the TSP will determine whether your payments are expected to last less than 10 years. We will do this by dividing the part of your account balance that you chose to be paid in monthly payments by the dollar amount that you chose for your monthly payment. If the result is less than 120, your payments will be eligible to be transferred.
If you later make a change to your monthly dollar amount, the TSP will again determine whether your remaining payments are expected to last less than 10 years and whether they are eligible to be transferred.
Note: If you transfer both a single payment and monthly payments, both types of payments must be sent to the same account at the same financial institution.
To request a transfer, you must indicate on your withdrawal form the percentage of your payment(s) that you want transferred to your IRA or eligible employer plan. In addition, you and your IRA or plan must provide the information requested on your TSP withdrawal form. Do not use forms of the plan or financial institution; the TSP cannot accept them.
If your plan or financial institution needs the TSP to certify that the money you are transferring is eligible for transfer, you can provide it with a copy of the Fact Sheet “Important Information Regarding Transfers From the Thrift Savings Plan to Eligible Retirement Plans.“ It is available from the Forms & Publications section of the TSP Web site or from the TSP.
If you indicate on your withdrawal request that you want the TSP to transfer your payment(s), but you do not provide complete transfer information, your withdrawal request will not be processed.
Rolling Over Your Withdrawal. Amounts that are not transferred will be paid directly to you (or to your checking or savings account, if you so elect), and the appropriate amount will be withheld for Federal income tax. Taxable payments that are eligible to be transferred, but are sent directly to you, can still be “rolled over“ to an IRA or an eligible employer plan within 60 days of the date you receive the funds from the TSP.
Transferring tax-exempt TSP balances.
Tax-exempt balances resulting from contributions from pay subject to the combat zone tax exclusion may also be transferred or rolled over into an IRA or transferred to an eligible employer plan, if the IRA or plan certifies that it will accept them. However, even though the withdrawal from your account will be based on the proportion of taxable and tax-exempt
balances in the account, if you choose to transfer a portion of the withdrawal, your taxable money only will be transferred to your IRA or plan first. Tax-exempt money will be transferred only if the taxable
portion of your withdrawal does not satisfy the percentage of your withdrawal that you elected to transfer to your IRA or plan.
For more information about transferring or rolling over your withdrawal, read the tax notice “Important Tax Information About Payments From Your TSP Account.”
