Leave It in the TSP or Roll to an IRA?
When you retire, you'll hear plenty of voices — some of them paid on commission — telling you to roll your Thrift Savings Plan into an IRA. Sometimes that's the right move. Often it isn't. This is a genuine tradeoff, and the goal here is to lay out both sides honestly so you can decide on the merits, not on someone else's incentive.
The case for keeping it in the TSP
- Rock-bottom fees. The TSP's expense ratios are among the lowest of any retirement plan anywhere. Over decades, the fee difference versus a typical IRA or managed account can quietly add up to tens of thousands of dollars.
- The G Fund. The Government Securities (G) Fund is unique to the TSP — government-backed principal with interest rates tied to longer-term Treasuries. You cannot buy it anywhere else, and many retirees value it as a stable anchor.
- The age-55 access rule. If you separated in or after the year you turned 55 (or 50 for special category), the TSP gives you penalty-free withdrawals — an exception you may lose on funds rolled to an IRA.
- Simplicity. Fewer accounts, fewer ways to be sold something you don't need.
The case for rolling to an IRA
- More investment choices. The TSP offers a handful of funds; an IRA opens the full menu of index funds, ETFs, and individual securities. Whether you need that is a fair question.
- More flexible strategies. Some withdrawal sequences, qualified charitable distributions, and broader tax-planning workflows may be easier or only possible outside the TSP. Roth in-plan conversions are now available inside the TSP for eligible balances, so don't roll money out solely on the outdated assumption that the TSP cannot convert traditional money to Roth.
- Consolidation. If you have other accounts scattered around, pulling everything into one IRA can simplify management and estate planning.
You don't have to choose all-or-nothing
It's not necessarily a binary. You can keep a core balance in the TSP for the low fees, the G Fund, and the age-55 access, while rolling a portion to an IRA for a specific purpose like a planned Roth conversion. The right structure depends on your goals — and is worth working out with a fiduciary professional who is paid the same regardless of what you decide.
Decide from the whole picture, not a sales pitch.
The FedRetireCheck Readiness Report shows how your TSP fits with your pension and Social Security — so you can evaluate any rollover pitch against your actual plan.
Get the $49 report