By Mike Miles
January 13th, 2014 | Uncategorized
Q. A recent question read in part: “I have more than four years until military retirement (April 2018). At that time, will I be able to transfer all Roth TSP contributions to my Roth IRA? I have no plans of transferring the traditional TSP balance. The goal is to combine Roth TSP/Roth IRA contributions and pay cash for retirement home.”
I agree that if you take a monthly withdrawal from the Thrift Savings Plan, they take from both traditional and Roth accounts. But I thought the TSP 90 form allowed transfer of Roth TSP contributions to a Roth IRA fund or Traditional TSP contributions to a traditional IRA (essentially a type to type rollover at retirement)? So if they did the transfer of only Roth TSP funds to the Roth IRA, couldn’t they use this strategy (independent of merit)? Is it different with military retirement?
A. You are correct. I misunderstood the constraint imposed as part of the question. You may request a withdrawal, which must include both traditional and Roth money, and then roll over only the Roth part of the distribution.