Can TSP money be rolled to a Roth IRA?

The short answer

The TSP is treated as a qualified retirement plan for rollover purposes, and the publication says you can roll a distribution from the CSRS, FERS or TSP into a Roth IRA. What changes the tax result is which kind of money you roll. The traditional balance holds contributions and earnings that were never taxed, so rolling it into a Roth IRA means the IRS taxes it now. The Roth balance was already taxed, so it can move to a Roth IRA with no tax if the Roth TSP conditions are met.

Traditional TSP money to a Roth IRA

If you ask the TSP to transfer money from traditional contributions and earnings to a Roth IRA, the publication says the amount transferred is taxed in the current year. It is handled under the same rules as converting a traditional IRA into a Roth IRA, which Publication 590-A covers. You report the rollover on Form 1040 lines 5a and 5b: line 5a gets the total distribution before withholding (Form 1099-R box 1), and line 5b gets what remains after you subtract any contributions that were taxable when made and any qualified rollover from a designated Roth account.

Two things help. The 10% additional tax on early distributions does not apply to a rollover into a Roth IRA, and a direct rollover has no mandatory withholding. The publication warns that because no tax is withheld, you may want to elect withholding or make estimated tax payments, since the tax bill arrives with your return.

Roth TSP money to a Roth IRA

The publication explains that a direct rollover of Roth contributions and earnings, if the Roth TSP conditions are met, to a Roth 401(k), Roth 403(b), Roth 457(b) or Roth IRA is not taxed when transferred or when later paid out. The conditions are a 5-tax-year period of participation, and a distribution made on or after age 59½, to a beneficiary or estate after death, or because of disability. Roth money cannot go to a traditional IRA or traditional SIMPLE IRA. Going the other way is also blocked: you cannot roll any portion of a traditional TSP balance into your Roth TSP.

Direct rollover versus payment to you

With a direct rollover, the TSP sends the money to the Roth IRA trustee and nothing is withheld from the transfer. If the TSP instead pays an eligible rollover distribution to you, it must withhold 20% for income tax, even if you plan to roll it over, and you must complete the rollover within 60 days. To roll over the full amount you would need to replace the withheld 20% from other money. Roth money paid to you has no withholding because tax was already paid on it.

Some TSP payments cannot be rolled over at all: installment payments over your life expectancy, joint life expectancies or 10 years or more, required minimum distributions, deemed loan distributions while you are still in service, and hardship distributions.

Worked example

Suppose, as an illustration, that you leave government service and the TSP directly rolls $40,000 from your traditional balance and $10,000 from a qualified Roth balance to a Roth IRA. Line 5a shows the $50,000 total. Line 5b shows $40,000, the traditional money, because the qualified Roth rollover is subtracted. The extra $40,000 of income can push you into a higher bracket, so some people spread conversions over several years. If the same $40,000 were paid to you first, 20% or $8,000 would be withheld and you would have to find $8,000 elsewhere to roll over the full amount.

What to check before you act

Look at the TSP’s written explanation, which must reach you no earlier than 90 days and no later than 30 days before an eligible rollover distribution. Confirm how much of your balance is Roth and whether the Roth conditions are met. Estimate the added tax, and consider whether the 20% default withholding on money paid to you would leave a gap. Roth IRA rules about holding periods and later distributions are in Publication 590-B. This is a summary of a federal publication, not personal advice.

Sources

• IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits (2025): Thrift Savings Plan (Roth TSP balance; Direct rollover by the TSP to a Roth IRA); Rollover Rules (Distributions eligible for rollover treatment; Direct rollover option; Payment to you option); Rollovers to Roth IRAs (How to report). Part II. Read November 2, 2026.

Edition read: Publication 721 (2025), for use in preparing 2025 returns. Dollar limits and dates in this publication are for 2025; check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it.