Your eligibility to contribute to a traditional IRA is unaffected by your contributions to a TSP. According to IRS Publication 590, anyone who meets these criteria is eligible to make contributions to a traditional IRA, even if they are also participating in an employer-sponsored plan.

To transfer or roll over a traditional IRA into your TSP account, you and the IRA custodian must complete Form TSP-60, Request for a Transfer Into the TSP. The form is available on the TSP website or you can call the ThriftLine.

Both the TSP and IRAs (traditional IRAs and Roth IRAs) are tax-favored retirement accounts. The TSP is classified as a “defined contribution” retirement plan. It is similar to a private company-sponsored 401(k) qualified retirement plan or non-profit organization 403(b) qualified retirement plan.

You are allowed to withdraw funds from your IRA and place them into a savings account as you see fit. However, depending upon the specific terms of your withdrawal, you may be forced to pay tax on these funds.

With a direct rollover, you instruct the TSP to send your TSP assets directly to your new employer’s plan or to an IRA—and you never have to handle the money yourself. With an indirect rollover, you start by requesting a lump-sum distribution from TSP and then take responsibility for completing the transfer.

The TSP is better if your taxes are high today and you expect them to be much lower in retirement. It is better to use your deduction against the higher tax rate. The Roth IRA is better the further away you are from retirement.

$19,500

No, you should not include your TSP contributions separately on your tax return. All you have to do is report W2 data in Turbo Tax exactly as it appears on the form. The TSP plan contributions you elect to make come directly out of your salary.

Leave it in the TSP and let it grow Depending on when you begin retirement, you can simply leave the money in the TSP let it continue to grow. If you do not need to access it yet, it might be wise to let it be. Similar to other retirement accounts, you will need to begin minimum withdrawals at age 72.

A beneficiary who is not a surviving spouse cannot retain a TSP account. The death benefit payment will be made directly to the beneficiary or to an “inherited” IRA. If a beneficiary participant dies, the new beneficiary(ies) cannot continue to maintain the account in the TSP.

The average for this group would be $208,000, but this average isn’t representative of actual balances, and in real life this sort of thing happens all the time….Average 401k Balance by Age.

As most federal/postal workers and retirees know, the Thrift Savings Plan is a good deal. About 2% of the 75,000-plus people have become TSP millionaires in the course of their federal service.

84,808

59½ or older

age 72

Unless you’re subject to required minimum distributions1 or you have a balance of less than $200,2 there’s no requirement for you to make withdrawals from your account. So you can leave your entire account balance in the TSP and continue to enjoy tax-deferred earnings and our low administrative expenses.

If you want to avoid paying taxes on the money in your TSP account for as long as possible, do not to take any withdrawals until the IRS requires you to do so. By law, you are required to take required minimum distributions (RMDs) beginning the year you turn 72.

By 40, you should have three times your salary saved. By 50, you should have six times your salary saved. By 60, you should have eight times your salary saved. By 67, you should have 10 times your salary saved.