How to Roll Over Your TSP: Steps, Deadlines, and Withholding

To roll over your Thrift Savings Plan, you request a distribution through your account at tsp.gov and send it directly to a traditional IRA, Roth IRA, or another employer plan such as a 401(k), 403(b), or governmental 457(b). You have to be eligible first, which usually means you’ve separated from federal service or you’ve reached age 59½ while still working. The mechanics are straightforward. The tax consequences are not, and a wrong destination or a missed deadline can cost you income tax plus a 10% early withdrawal penalty.

Who Can Roll Over a TSP Account

The clearest path opens when you leave federal service. Once your agency reports your separation, you can request a distribution of all or part of your balance.¹ Separation covers resignation, retirement, termination, or discharge from a federal civilian job or the uniformed services. TSP won’t process a post-separation distribution until its records show you’re actually separated, and if your old agency reports that you’ve returned to a TSP-eligible position within 31 calendar days, any pending distribution is canceled.

Still working for the federal government? Your main option is an age-based in-service withdrawal after you turn 59½.² You can pull some or all of your vested balance while continuing to contribute. The withdrawal must be at least $1,000 unless you’re taking the entire balance.³ Age-based withdrawals are eligible rollover distributions, so they can go directly to an IRA or another plan.

Hardship withdrawals are a separate category and are not eligible for rollover. For rollover purposes, separation and the 59½ in-service withdrawal are the two doors that matter.

Where Your TSP Money Can Go

TSP funds can move into a traditional IRA, a Roth IRA, or an eligible employer plan such as a 401(k), 403(b), or governmental 457(b). What you owe in tax depends entirely on the pairing.

Traditional TSP to a traditional IRA or employer plan: no tax at the time of transfer, and the money stays tax-deferred until you withdraw it later.
Roth TSP to a Roth IRA: no tax at the time of transfer, since both sides hold after-tax money, and qualified withdrawals later remain tax-free.
Traditional TSP to a Roth IRA: the full converted amount counts as taxable income for the year. You have to pay the tax bill from outside funds rather than from the converted amount, and the conversion can push you into a higher bracket.⁴

You can distribute from your traditional balance only, your Roth balance only, or proportionally from both.¹ Before you file the request, confirm with the receiving institution that it accepts the type of funds you’re sending. Not every custodian takes Roth rollovers from employer plans or tax-exempt balances.

Direct Rollover or Indirect Rollover

This is the single most consequential choice. In a direct rollover, TSP sends the money straight to the receiving institution. The check is made payable to the new custodian, not to you. Nothing is withheld, there’s no 60-day clock, and there’s no opening for a costly mistake.⁵

In an indirect rollover, TSP sends you a check made out to you personally, and 20% is withheld for federal income tax right off the top.⁶ You then have 60 days to deposit the funds into a qualified retirement account.⁷ Unless you have a specific reason to touch the money on the way through, take the direct route.

How to Request the Rollover

Log into your account at tsp.gov and open the withdrawal section. The online tool walks you through a series of questions and generates Form TSP-99, which summarizes your request.⁸ Some requests can be completed entirely online. Others require you to print the form, collect signatures, have it notarized, and mail it in. Don’t alter any pre-printed information on the form or TSP will reject it.

Have this information ready before you start:

The receiving account type (traditional IRA, Roth IRA, or the specific employer plan).
The receiving institution’s name and mailing address, including the exact payee name that should appear on the check.
Your account number at the receiving institution.
The distribution amount, either as a dollar figure, a percentage, or the full balance. Partial distributions must be at least $1,000.⁹
Whether to pull from your traditional balance, Roth balance, or both proportionally.

Any new postal address or direct deposit information must be on file for at least seven days before it can receive funds.¹⁰ TSP disburses payments each business day and tells participants to allow a few days for processing. If a check is lost, replacements can take six weeks or longer.

Spousal Consent for FERS and CSRS Participants

Married participants can’t roll over a TSP account alone, and the rules split by retirement system. Under FERS, your spouse must give written consent before TSP processes a withdrawal or rollover.¹¹ This applies to post-separation distributions and to in-service withdrawals.

Under CSRS, the spouse doesn’t sign, but TSP must notify them. You give TSP your spouse’s email or mailing address and the record keeper sends the notice.¹²

Both systems allow narrow exceptions when a spouse can’t be located or when a court order documents circumstances like long-term separation without a financial relationship or spousal abandonment. Exceptions require documentation submitted to the TSP Executive Director.

Pay Off Any Outstanding TSP Loan First

An outstanding TSP loan blocks a full withdrawal of the account. You can still take a partial distribution, but if you want to roll over the entire balance, the loan has to be repaid in full or formally foreclosed first.¹

If you separate without repaying, TSP gives you 90 days to make payments on your own before foreclosing the loan.¹³ Once foreclosed, the unpaid balance is treated as a taxable distribution, reported on Form 1099-R. You’ll owe income tax on the outstanding amount, plus the 10% early withdrawal penalty if you’re under 59½.

There is a workaround. After a post-separation foreclosure, you can roll over the taxable amount using personal funds into your TSP account, another employer plan, or an IRA. The deadline is the due date of your federal tax return for the year of the foreclosure, including extensions.⁴ Completing that rollover defers the income tax and avoids the penalty. The word “personal” is doing real work: TSP already distributed the loan proceeds to you, so replacing them requires outside money.

The 60-Day Deadline and the 20% Withholding Trap

If you chose an indirect rollover and received a check payable to you, the clock starts immediately. You have 60 days from receipt to deposit the full original amount into a qualified retirement account.⁷ Miss the deadline and the IRS treats the whole distribution as taxable income. Under 59½ and you also owe the 10% additional tax on early distributions.¹⁴

The math is where people slip. Because TSP withheld 20% for federal tax, the check you received is smaller than your actual distribution. On a $100,000 account, you get $80,000. To avoid tax on the shortfall, you still have to deposit the full $100,000, which means covering the missing $20,000 from your own savings. The withheld $20,000 gets credited against your tax liability when you file, and comes back as a refund if you don’t owe.⁶ Deposit only the $80,000 you received and the IRS taxes the remaining $20,000 as a permanent distribution.

If you miss the 60-day window due to circumstances beyond your control, the IRS recognizes three possible remedies: an automatic waiver where the receiving institution caused the failure, a private letter ruling requested from the IRS for a fee, or self-certification of a qualifying reason to the receiving plan or IRA.¹⁵ Self-certifications are subject to IRS review during an audit.

The Age 55 Rule Doesn’t Follow the Money to an IRA

One penalty exception catches many federal employees off guard. If you separate from service during or after the calendar year you turn 55, distributions from your TSP are exempt from the 10% early withdrawal penalty even though you’re under 59½.¹⁴ This rule applies to employer plans like TSP. It does not carry over once the money is in an IRA. Distributions from an IRA before 59½ generally face the penalty regardless of when you separated. If you’re between 55 and 59½ and might need to draw on the account soon, think carefully before rolling everything out of TSP.

Rolling Over After Age 73

Once you reach 73, the IRS requires you to take a minimum distribution from your TSP each year.¹⁶ RMD amounts cannot be rolled over into another tax-deferred account. If you request a rollover in a year you owe an RMD, TSP will calculate and distribute the RMD directly to you first, then process the rollover for what remains.¹⁷ If you’re still employed by the federal government past 73, you can generally delay RMDs from TSP until the year you retire. Once you separate, the requirement kicks in.

Tax-Exempt Combat Zone Contributions

Service members who contributed to TSP from tax-exempt combat zone pay have a wrinkle. Those contributions weren’t taxed going in and won’t be taxed coming out. When you roll over from a traditional balance that includes tax-exempt money, TSP rolls the taxable portion first, and tax-exempt funds move only if the requested amount exceeds your taxable balance.⁴

Not every IRA custodian or employer plan accepts tax-exempt balances. If the receiving institution won’t take them, TSP pays that portion directly to you instead of rolling it over.¹⁸ Confirm with the receiving institution before you submit. Tax-exempt contributions made to your Roth TSP balance are treated as regular Roth contributions once they land in the Roth bucket, and are never taxed or subject to the early withdrawal penalty.

1
eCFR. 5 CFR 1650.2 – Eligibility and General Rules for a TSP Withdrawal
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eCFR. 5 CFR 1650.31 – Age-Based Withdrawals
3
The Thrift Savings Plan (TSP). In-Service Withdrawal Types and Terms
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The Thrift Savings Plan (TSP). Changes to Tax Rules About TSP Payments
5
Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans
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Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
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Office of the Law Revision Counsel. 26 USC 402 – Taxability of Beneficiary of Employees Trust
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The Thrift Savings Plan (TSP). New Options and Processes for Withdrawal Requests for Separated and Beneficiary Participants
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The Thrift Savings Plan (TSP). Withdrawals in Retirement
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The Thrift Savings Plan (TSP). Taking Money From Your Account
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eCFR. 5 CFR 1650.64 – Executive Directors Exception to the Spousal Consent Requirement
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eCFR. 5 CFR Part 1650 Subpart G – Spousal Rights
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The Thrift Savings Plan (TSP). Effect of Nonpay Status on Your TSP Account
14
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
15
Internal Revenue Service. Retirement Plans FAQs Relating to Waivers of the 60-Day Rollover Requirement
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Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
17
The Thrift Savings Plan (TSP). Installments Total and Partial Distributions Life Annuities
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The Thrift Savings Plan (TSP). Rollovers From the Thrift Savings Plan to Eligible Retirement Plans