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How to Rollover Your TSP To A Gold IRA Easily! 9 Best Tips

Introduction to a TSP

The Thrift Savings Plan (TSP) is a retirement savings program offered to members of the armed forces and federal government employees (TSP) .

You may be interested in investing in gold and learning how to diversify your retirement portfolio by including precious metals such as gold and silver as a hedge against inflation, devaluation, and economic collapse beyond the scope of the plan's basic investment features. Here we'll show you how to rollover your TSP to a Gold IRA.

We'll walk you through the process of rollover your tsp to a gold IRA by transferring your TSP funds to a Gold IRA, and we'll also explain how TSPs function and why they aren't the ideal vehicle for all of your retirement savings.

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    Thrift Savings Plan (TSP) 101

    The Thrift Savings Plan (TSP) is what's known as a "defined contribution plan," which means that you can put in as much as you want, but the value of your plan is not guaranteed. When you have a defined benefit plan, you know exactly how much money you'll get in retirement. Your retirement savings in a defined contribution plan are vulnerable to the ups and downs of the stock market.

    Most workers have at least some familiarity with defined contribution plans like 401(k)s and 403(b)s. Similar accounts, known as Thrift Savings Plans (TSPs), were made available to federal employees in 1986 thanks to the Federal Employees Retirement System Act.

    A Thrift Savings Plan (TSP) is a retirement savings plan similar to a 401(k) that is managed by a board of presidential appointees. Potentially, your company may match the amount you put into the program.

    For TSP plans, you're stuck with what amounts to a small menu of investment opportunities.

    The assets owned by the various such options in the Thrift Savings Plan are completely independent of the employee's discretion. The only way to get exactly what you want is to combine different features.

    The most common types of TSP investments are "Lifecycle Funds," which include:

    • G Fund: government securities
    • F Fund: fixed income index
    • C Fund: common stock index
    • S Fund: small-cap stock index fund
    • I Fund: international stock index fund

    You, as a person employed, have the option of either putting your money into a pre-set Lifestyle fund whose allocation is determined by your projected retirement date, or assembling your own portfolio from the five available funds.

    Astute readers will notice that precious metals like gold and silver are conspicuously absent from this list. This is because you are not allowed to store physical precious metals in your TSP account. Neither gold stocks nor gold ETFs are eligible for investment in a TSP.

    Still, there's hope. Once you've left your federal job, you can rollover your TSP to a gold IRA or another qualified employer plan without having to pay taxes on the money.

    In Which Plans are Gold Bullion Allowed?

    Only a small subset of retirement accounts will allow you to hold gold bullion in the form of coins or bars. In the same way, silver, platinum, and palladium share this quality. Both a Gold IRA and a traditional 401(k) plan for the self-employed allow for the purchase of bullion.

    Unlike a standard IRA, a self-directed IRA gives you more freedom to diversify your portfolio beyond just stocks and bonds by purchasing precious metals (to invest in gold directly indirectly), cryptocurrencies, and even real estate.

    Look for a reputable Gold IRA merchant in your area. You can rely on them to direct you toward a reliable SDIRA custodian and gold storage depository, and to assist you in completing the necessary paperwork.

    To be eligible for an IRA, you must adhere to regulations that limit your holdings to buy gold investing certain types of precious metal coins and bars. Common examples include "American Eagle" coins from the United States Mint and "maple leaf" coins from Canada's Royal Canadian Mint. Coins and bullion can be used to rollover your TSP to a Gold IRA.

    The purity of precious metal bars is strictly regulated. You know exactly what you're getting when you buy coins, and it's easier to do so. Keep in mind that numismatic coins aren't allowed in an IRA, only bullion.

    Additionally, "paper gold" in the form of shares of gold mining companies or gold-backed exchange-traded funds (ETFs) can be purchased for an individual retirement account. Don't equate paper currency with actual gold, though. In contrast to the direct correlation between the price of gold and the value of gold bullion, the value of gold mining stocks is determined by factors other than gold's market price. Even if gold is at an all-time high, a strike or cave-in could destroy the stock market (transfer TSP to fidelity IRA).

    When ETFs are hit by sudden surges in buying or selling pressure, they can experience significant price deviations from gold. Importantly, in the event of a financial collapse, you can be sure that gold and silver coins will be accepted as payment for all of your necessities without question.

    Try doing that with stock certificates, and you'll quickly understand why so many investors prefer to hold actual gold to paper replicas.

    Your Guide: How to Rollover Your TSP To A Gold IRA

    image: How to Convert TSP to Gold IRAHow to rollover TSP to IRA: If you want to keep contributing to your retirement fund after leaving the federal government, you'll need to move your TSP to another tax-deferred account. The value of your account, if rolled into a traditional or Roth IRA, will be considered income for the current tax year.

    But the biggest benefit of rolling over your TSP into an IRA is the ability to hold precious metal bullion in a tax-deferred account until the time of withdrawal.


    You Can Convert Your TSP to a Gold IRA in Two Ways:

    1. To begin, you can perform a rollover, in which you transfer your TSP funds to an IRA or multiple IRAs. Instead of making a contribution, which is capped at $6,000 per year ($7,000 if over 50), you must designate the deposit as a rollover. It's important to remember that you have only 60 days to complete the rollover before the IRS considers the money a withdrawal and taxes it accordingly. Thus, the rollover approach has drawbacks, as errors in the process can result in significant tax liabilities and deprive you of a tax-deferred retirement savings account.
    2. Transferring TSP funds or assets directly to an IRA is the second option, also known as a trustee-to-trustee transfer. The funds are transferred without your involvement and deposited into the new account without delay (s). With the direct approach, you can bypass the 60-day restriction altogether. You can have more than one individual retirement account (IRA). You can easily split your savings between a traditional IRA and a Gold IRA in this way. You can invest as much or as little of your money as you like in precious metals by dividing your transfers however you see fit. A lot of professionals say you should put away 10% of your money in precious metals.

    To protect your retirement savings, when rollover your TSP to a gold IRA, only use a reputable gold dealer when converting any portion of your TSP to a Gold IRA. If you want to diversify your retirement portfolio with physical gold and silver, you might want to consider moving some of your TSP money into a precious metals IRA.

    9 Tips to Think About if Rolling Over TSP Funds

    Americans investing for retirement have more money in IRAs than in TSPs. According to the Employee Benefit Research Institute, the main source of IRA contributions is those who shift money from the TSP or equivalent 401(k) or 403(b) plans when they leave a job.

    You've probably seen advertising enticing you to roll your TSP to an IRA. If you're thinking about rolling over money from your TSP into an IRA, consider staying put or transferring money from another retirement account into your TSP.

    Many Americans are confused about their retirement savings alternatives. Whether to relocate your retirement savings is a big choice. Switching employment or retiring doesn't always need instant action. Consider your choices. Do your research to find what's best for you.

    1. Talk to a financial or tax specialist. Tax consequences, service disparities, and fees and charges across retirement savings options should be discussed. If your financial advisor suggests selling plan holdings or buying new IRA securities, ask why. Don't buy something you don't comprehend.

    2. Avoid indirect rollovers. With a direct rollover, you tell the TSP to transmit your TSP assets to your new employer's plan or to an IRA. You request a lump-sum payout from TSP and then complete the transfer. Indirect rollovers are taxed. The plan must withhold 20% to pay taxes if the rollover isn't completed. You must deposit the cash within 60 days to avoid taxes on pretax contributions and gains and a 10% tax penalty if you're under 59 1/2. If you wish to delay taxes on the whole amount paid out, you must contribute 20 percent from another source (you get the 20 percent back if you properly complete the rollover). (Direct rollovers explained.)

    3. Reduce taxes by rolling over Roth to Roth and Traditional to Traditional. When rolling over the TSP to an IRA, you select either traditional IRA or Roth IRA. You will owe taxes if you go from traditional to traditional or Roth to Roth. But move a traditional to a Roth and owe taxes on the amount converted. As this can get tricky, always discuss this with your plan or tax professional.

    Roth employer matches are treated differently. The IRS mandates that employer contributions to a Roth plan be matched and deposited in a pre-tax account. Future employers may match TSP contributions for military members. To avoid taxes when rolling over a Roth plan with employer matching contributions, transfer your contributions and profits to a Roth IRA and your company's to a conventional IRA.

    4. Avoid "free" or "no-cost" offers. Advertising concerning rollovers and IRA-related services is popular among financial firms. Advertising may be deceptive. We've all seen ads and sales materials that imply investors pay no fees. Even if a rollover has no fees, account administration, investment management, or both will. Don't rollover retirement assets based on a so-called, "free" offer.

    5. Evaluate transfer options. There are 4 options.

    1. Your TSP might hold all or part of your funds.
    2. If approved, you can transfer assets to your new employer's plan (check with HR).
    3. Roll plan assets into an IRA.
    4. Or cash out.

    Younger people should avoid cashing out their accounts. If you're under 5912, the IRS may consider your payoff an early distribution and impose a 10% early withdrawal penalty on top of federal, state, and local taxes.

    6. Recognize interest conflicts. Financial advisers that advocate a rollover may earn commissions or fees. Leaving TSP assets or rolling them to a new employer's plan may result in little or no remuneration for a financial advisor. Even if the proposal is legitimate, any financial advisor who advocates moving TSP money to an IRA might gain financially.

    7. Age counts. Leaving your work between 55 and 59 1/2 may allow penalty-free TSP withdrawals. IRA withdrawals are penalty-free after age 59 1/2. Once you reach age 72 (or 70 1/2 if you achieved that age before 2020), all conventional employment plans and traditional IRAs need periodic withdrawals of specific minimum amounts, called RMDs (RMD). Roth 401(k)s are subject to RMDs. Roth IRAs don't have RMDs while the owner is alive. If you're still working at 72, you don't have to take RMDs from your employer's plan. This may benefit people planning to work into their 70s.

    8. Know the fees, expenses and costs. Both the TSP and IRA include investment-related fees. Sales loads, commissions, mutual fund charges, and investment adviser fees are investment-related expenditures. Plan expenses might include administrative costs (recordkeeping and compliance fees) and fees for services like customer service. Employers may pay part or all administrative costs. IRA fees include administrative, set-up, and custodian expenses. Know how much you pay TSP to manage your retirement assets before rolling over. TSP fees are cheap. Compare to a new plan or IRA's costs. Ask your financial advisor about IRA costs and study your account agreement and investment prospectuses.

    9. Compare investing services. An IRA may provide more investment possibilities than an employment plan, but not as many low-cost options as the TSP. How pleased you are with the TSP will affect how appealing the IRA alternatives are. Some employer plans include financial advice, planning tools, helplines, instructional materials, and workshops. IRA providers may offer complete brokerage, investment counseling, and distribution planning. Self-directed IRAs have drawbacks.

    Finally, transfer monies into the TSP instead of out. Many messages urging IRA rollovers focus on TSP or similar programs. You can invest, though. You can shift tax-deferred money from regular IRAs, SIMPLE IRAs, and qualifying workplace plans into your standard TSP account. Direct rollovers are transmitted from an employer-sponsored retirement plan to the TSP, whereas indirect rollovers are performed after a plan payout. The TSP will accept Roth 401(k), Roth 403(b), and Roth 457(b) transfers into your Roth balance, but you can't rollover Roth IRA assets into your TSP. The transfer creates a Roth balance if you don't already have one.

    Pros and Cons of TSP Rollover to Self-Directed Gold IRA

    Deciding whether to rollover your TSP into an IRA is a difficult decision. You should consult a financial planner to make the best decision for your situation. To offer some forethought prior to that meeting, consider these advantages and disadvantages of rolling over your TSP to any kind of IRA, including a Self-Directed Gold IRA:

    PROs: Advantages of Rollover from TSP

    1. Professional Investment Management For IRAs: A professional investment advisor can manage IRA investments directly, which is one benefit of transferring TSP funds to an IRA. Those who do not wish to manage their own investments and value the advice of an investment manager can benefit from money management. Keep in mind, however, that this may incur significant expenses, up to 1 percent of the AUM.

    A million-dollar rollover to a managed IRA, for instance, could incur annual fees of $10,000! These expenses do not include the expense ratios of the funds in which your money is invested. For some, this amount is excessive. Others, however, recognize the value of professional money management and are willing to pay for the service.

    2. Complete Investment Control With An IRA: With an IRA, you have greater control over your investments. With the TSP, you are limited to five funds or a combination thereof. This may be problematic if you are a novice investor, and you may end up making your retirement worse by having more options.

    3. The IRA Has More Investment Options than the TSP, which has fewer low-cost investment options. There are few low-cost investment options in the TSP. Individual stocks cannot be traded in a TSP or other mutual funds. Currently, the TSP does not offer REITs, which are mutual funds that invest in commercial real estate. These are common in the majority of managed portfolios. There are no additional investment alternatives, such as commodities and gold.

    4. Portability: IRAs offer enhanced portability: IRAs offer increased portability. Rollovers from one custodian to another typically involve the preservation of existing investments. With a TSP, the funds are only available within the plan, and no other custodian holds them; therefore, all funds must be sold and re-invested into the new IRA when a rollover is performed.

    CONs: Disadvantages of rolling over your TSP

    1. No Admin Fees For Funds Deposited After Leaving Government Service: There are no fees associated with leaving money in the TSP. Some accounts alter their fees. However, some TSP users have expressed frustration with the slow withdrawals and paperwork involved. However, these are not typical. The Thrift Savings Plan (TSP) is a large fund that serves a diverse population and tends to be more bureaucratic. As government, this is to be expected.

    2. IRAs Typically Have Higher Expense Ratios: At approximately 0.04%, the TSP has the lowest expense ratios among index funds. Most index funds have expense ratios that are higher than that. However, this is rapidly changing due to fee compression and increased industry competition. In contrast to other low-cost providers, however, the TSP offers a very low rate of return, which will hinder the long-term growth of your investments.

    3. Continue To Work In Federal Position Without RMD: At age 72, you are not required to take RMD (required minimum distribution). Suppose you continue your federal employment. If your funds are in a TSP, you are exempt from the RMD requirement. RMD stands for required minimum distributions from a tax-deferred TSP account. The government wants to establish a date when you must begin to withdraw a portion of the funds to pay taxes. Roth TSPs do not have RMDs at age 72 because all of the funds are after-tax.

    4. IRAs Offer Less Protection Against Creditors: Important to consider is the protection from creditors, with the TSP providing greater protection than an IRA. As with all 401(k) plans, these provide additional safeguards that should be carefully considered.

    5. Transferability of old 401k IRAs to the TSP: You can transfer your existing 401(k) or IRA to the TSP. A rollover will allow you to consolidate your investments into a single account for more efficient management. Rollovers are highly recommended because older 401(k) plans tend to receive less TLC, maximizing your return through consolidation.

    Summary: Pros & Cons of TSP to Gold IRAs


    • Professional Investment Management For IRAs
    • Complete Investment Control With An IRA
    • IRA Has More Investment Options Than The TSP
    • Portability: IRAs Offer Enhanced Portability


    • No Admin Fees For Funds Deposited After Leaving Government Service
    • IRAs Typically Have Higher Expense Ratios
    • Continue To Work In Federal Position Without RMD
    • IRAs Offer Less Protection Against Creditors
    • Transferability of old 401k IRAs to the TSP

    Frequently Asked Questions (FAQs)

    Can I roll my TSP into a gold IRA?

    TSP accounts are not allowed to hold individual securities. Exiting federal employees who have been contributing to the TSP can either leave their funds there (though they cannot make any more contributions) or transfer them to another qualified employer plan or an individual retirement account (IRA).

    Should I roll over my TSP into an IRA?

    To sum up, any financial advisor who suggests you transfer funds from your TSP to an IRA stands to gain financially from the transaction, regardless of how well-founded the advice may be.

    Can TSP invest in gold?

    You can have contributions made to your account by your employer in addition to the money you set aside through pretax payroll deductions. The Thrift Savings Plan (TSP) is similar to 401(k)s in that it allows you to invest your money however you see fit. Gold is not one of them, but stock and bond funds are.

    Can I transfer money from TSP to IRA?

    A pre-tax retirement plan offered by your employer (like a 401(k), 403(b), or 457) is an option for those with traditional TSPs. The common IRA. A Roth Individual Retirement Account.

    What is a good TSP balance at retirement?

    Most financial planners recommend accumulating at least $250,000 in your TSP by the time you retire if you want to withdraw $10,000 per year after accounting for inflation.

    What fund should I put my TSP in 2022?

    For the month of July 2022, the best performing TSP Fund was the S Fund, with a return of 10.32%. C Fund returns were 9.22%, not far behind. A return of 5.15 percent was achieved by the I Fund. The G Fund has generated the highest return (1.41%) so far in 2022.

    Where should I move my TSP funds?

    It may be advised to move money from the C, S, and I stock funds into the G bond fund.

    *This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on to avoid any Federal Government tax penalties. Individuals are encouraged to seek advice from their tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.