How to Make a Roth Rollover From a TSP

by Mike Parker

A Thrift Savings Plan (TSP) is a retirement program for members of the U.S. armed forces and federal government employees. It operates similarly to a private company's 401(k) retirement program, in that it offers participants multiple savings and investment options for their retirement dollars, and contributions are make on a pretax basis. As of 2012, TSP offers a Roth option. Plan participants may also roll some or all of their qualifying funds from their TSP into a Roth account.

1. Determine your eligibility to make a TSP-to-Roth rollover. There are three primary eligibility statuses based on your age, disability or employment status. You can take qualified withdrawals from your TSP and roll them into a Roth account once you reach age 59 1/2. You can take qualified withdrawals from your TSP if you become disabled. You are eligible to withdraw all or a portion of funds in your TSP account upon separation from federal service regardless of your age, although a tax penalty may apply if you are less than 59 1/2 years of age.

2. Determine whether the tax consequences of rolling your TSP funds into a Roth account are appropriate for your situation. TSP accounts are typically funded with pretax dollars, and you must pay federal income taxes on these funds as you withdraw them. Non-qualified withdrawals, such as those made prior to you reaching age 59 1/2, may also involve a tax penalty of 10 percent of the amount withdrawn. Roth accounts are funded with after-tax dollars, but qualified withdrawals are free from federal income taxes. You are responsible for paying taxes on any funds you roll from your TSP into a Roth account, even if the funds go directly from the TSP to your Roth administrator and you never take possession of the funds. You should figure your tax liability both ways and determine whether it is more advantageous to leave your retirement funds in the tax-deferred TSP account and pay the taxes later or to pay the taxes now and roll them into an account that will grow tax-free.

3. Consult with your Roth administrator to ensure it is capable of receiving a TSP rollover. Keep in mind that the TSP will only make a direct transfer to one IRA account. If you do not roll the entire amount over into your Roth account, whatever is left in your TSP account will be paid directly to you. Complete the appropriate withdrawal request form, such as form TSP-70 if you wish to request a full withdrawal or form TSP-77 if you separate from federal service and want to request a partial withdrawal. These forms allow you to include information regarding the Roth account you wish your funds to be rolled into. Mail the forms to the TSP for processing. Requests for withdrawal must be made in writing.


  • The TSP does not withhold taxes on rollover transactions, but you are still liable for paying federal income taxes on these funds in the year the transfer is made.

Items you will need

  • TSP withdrawal request form

Photo Credits

  • Jupiterimages/Pixland/Getty Images