Transfer from Traditional to Roth

General TSP Discussion.

Moderator: Aitrus

Post Reply
Cpayne09
Posts: 46
Joined: Mon May 05, 2014 1:51 pm

Transfer from Traditional to Roth

Post by Cpayne09 »

Anyone know if TSP has the capability to transfer money from the traditional side to the roth side yet?

I have around 7K in my traditional from my first 2 years and over 40 in my roth. Should I even bother? Still got about 34 years to go before i'm 59-60 years old.

User avatar
evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Transfer from Traditional to Roth

Post by evilanne »

I doubt there is a way to do this currently. Roth was only introduced in May 2012. Changes to TSP rules are generally a slow, drawn out process.

The President approved the American Taxpayer Relief Act of 2012, on January 2, 2013. This law allows the TSP and other qualified plans to give participants the option to convert their traditional account balances to a Roth balance. The amount converted would be taxable to the participant. The Thrift Board is currently waiting for tax reporting guidance from the IRS and they will be studying the actions required to offer a conversion option. After their review they will make a decision on whether to proceed.
...
Currently, you will not be able to transfer money into the TSP from Roth IRAs. Also, you will not be able to convert money that is already in your TSP account into Roth money. Along the same lines, agency automatic and matching contributions will always be traditional, tax-deferred contributions, even if your own contributions are only Roth. You will not be able to convert any agency traditional contributions into Roth contributions.
Source: http://www.federalretirement.net/tsproth.htm

Cpayne09
Posts: 46
Joined: Mon May 05, 2014 1:51 pm

Re: Transfer from Traditional to Roth

Post by Cpayne09 »

Does that mean if I separated from federal service I wouldn't be able to roll over my TSP to a roth IRA?

User avatar
mjedlin66
Site Admin
Posts: 1569
Joined: Wed Oct 02, 2013 7:51 pm

Re: Transfer from Traditional to Roth

Post by mjedlin66 »

Cpayne09 wrote:Does that mean if I separated from federal service I wouldn't be able to roll over my TSP to a roth IRA?


You can do that. There is currently no option to convert traditional TSP to Roth TSP. Apparently there is also no option to roll Roth IRA into Roth TSP, which I did not know.

But you can still pull all of your money out of the TSP when you leave and roll it over to an IRA.
Owner/creator of TSPcalc.com - "Know your numbers"

Post Reply

Fund Prices2024-03-27

FundPriceDayYTD
G $18.14 0.01% 1.00%
F $19.09 0.26% -0.68%
C $82.11 0.87% 10.42%
S $82.19 1.48% 6.61%
I $42.68 0.56% 6.21%
L2065 $16.38 0.84% 8.36%
L2060 $16.38 0.84% 8.36%
L2055 $16.39 0.84% 8.36%
L2050 $32.73 0.71% 6.94%
L2045 $14.91 0.67% 6.56%
L2040 $54.37 0.63% 6.20%
L2035 $14.34 0.58% 5.77%
L2030 $47.66 0.53% 5.35%
L2025 $13.14 0.31% 3.40%
Linc $25.60 0.24% 2.79%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".