Performing a rollover from TSP to Vanguard?

[Fomalhaut]

I recently saw a post about rolling money from another account to Vanguard, but not the other way around, so I am posting my question here.

I left federal service in 2001, but left my money in TSP. The last couple of years I’ve been considering moving the funds from TSP to Vanguard. I assume this would be a rollover from TSP into a Traditional IRA account? (As my TSP account is not a Roth). Knowing there are Bogleheads that are present or former TSP members, I thought I might pick the brains of you folks to let me know what TSP might require of me before I can make the rollover.

TSP rollover document suggests they will send a treasury check to the new account. Is that always the case, or is there some other method that can be used? Should I create a traditional IRA account at Vanguard ahead of time to receive the funds? Are there any headaches or concerns I should be aware of?

Since I am not presently a federal worker, I assume I don’t have to worry about the 59 ½ age limit to do a rollover? (I am 58).

Is this a good time of the year to be thinking about starting the rollover process? Or does it matter?

PS: I went back and looked at a section on withdrawing or requesting a rollover---they say I can do a direct deposit, but will they do it correctly into a IRA account I set up on Vanguard, or will they screw up and consider it a taxable distribution?

[lakpr]

I would NOT suggest emptying the TSP plan. It has access to the unicorn G fund, which you will not get anywhere else, including Vanguard. TSP also allows you to roll other Traditional assets into the plan, EVEN if you are no longer a Federal employee.

Don't shoot yourself in the foot by exiting TSP. If anything, I suggest rolling over any prior 401(k) plans or Rollover IRAs or Traditional IRAs into the plan, then use the G fund as your fixed income part of your portfolio, instead of the stinking bond funds offered by Vanguard or pretty much any other brokerage or mutual fund platform. Unlike those stinkers, G fund will NEVER lose value ever, and provides you with ultimate safety. Of course, here I am assuming that you do want safety in your portfolio, not willing to invest 100% stocks all the time, even as you approach retirement. "Back in 2001" suggests you are at least in the lower 50's if not older ...

Bond funds are NOT safe.

[HueyLD]

PS: I went back and looked at a section on withdrawing or requesting a rollover---they say I can do a direct deposit, but will they do it correctly into a IRA account I set up on Vanguard, or will they screw up and consider it a taxable distribution?

A direct deposit can only be made to your own bank/brokerage account for withdrawals.

A direct rollover must be done by check. The rollover check can be mailed to you, or it can be mailed to a financial institution you designate. No DD for rollovers.

[gtd98765]

TSP rollover document suggests they will send a treasury check to the new account. Is that always the case, or is there some other method that can be used? Should I create a traditional IRA account at Vanguard ahead of time to receive the funds? Are there any headaches or concerns I should be aware of?

1. TSP will only do rollovers by mailing a paper check, either to you (not recommended!) or to the custodian of your new IRA account.
2. Yes, create the IRA account at Vanguard ahead of time, before you request the TSP rollover on the TSP website. You will have to add the new custodian on the TSP website a week ahead of when you want to request the rollover (this is a security measure).
3. If you keep your TSP account open by leaving $200 or more in it (I think, check!), you could rollover back to the TSP in the future if things change for you.

[UpperNwGuy]

The last couple of years I’ve been considering moving the funds from TSP to Vanguard.

Why move the funds?

[rkhusky]

+1 for starting the process at Vanguard and then entering the info on the TSP website a week ahead of time.

It takes about a week for the money to show up at Vanguard.

I have rolled over money to an IRA a few times now in order to do Roth conversions until I start taking SS. I still have money in the TSP, as I keep the money I would normally have in Treasuries in the G fund. It’s much easier to keep the rest of the portfolio at Vanguard in terms of rebalancing, withdrawing to my bank, and for the many different investment options.

I ran into a hiccup a few years ago because I have the TSP 2FA go to a voice call rather than a text. It seemed to only affect rollovers. Perhaps they have fixed that now.

If you are married, your spouse will need to sign off on the rollover. That’s done electronically now.

[hamhocs]

I did 3 rollovers this year after turning 59 1/2. Still working so still contributing to it, but I rolled over nearly all of it to Schwab. Did the Roth portion first. Then did two from Traditional, both times receiving transfer bonuses from Schwab.

On the TSP site, the option to do the rollover showed up the day of (or maybe after) turning 59.5. I did everything from that site, had the check sent to me made out to Schwab, FBO me. Then I just dropped the check off at a Schwab branch. I had an existing Roth at Schwab and needed to open up a rollover IRA for the Trad beforehand. It was pretty easy.

[delamer]

The first step you should take is to set up the rollover Traditional IRA at Vanguard. Make sure the name on the IRA is exactly the same as on your TSP. If your TSP account is in the name “Leroy Jethro Gibbs” don’t use “Leroy J. Gibbs” on the IRA. Make sure they match.

You can do that online.

Contact TSP once the IRA is set up and you have an account number.

Yes, there is always is a chance the TSP (or Vanguard) will screw it up. But if you follow the procedure on both ends, odds are heavily in your favor. I’d either get the process started right now or wait until early next year. With so many people trying to do RMDs and QCDs before the calendar year ends, later in December is not a great time to be doing non-urgent transactions.

Good luck.

[Crustus]

Suggestion. Try it with a small transfer first to make sure it works. TSP no longer has a waiting period between transfers (out, at least). Debugging as opposed to deploy, fix later.

[02nz]

Double- and triple-check Vanguard's work, because they clearly can't be bothered:

viewtopic.php?t=261539

[rkhusky]

Double- and triple-check Vanguard's work, because they clearly can't be bothered:

viewtopic.php?t=261539

Not really relevant because that was under the old TSP system with notarized paper forms mailed or faxed around. In the new system, all you can check now is if the Vanguard account is created and then when the money shows up in your Vanguard account.

[02nz]

Double- and triple-check Vanguard's work, because they clearly can't be bothered:

viewtopic.php?t=261539

Not really relevant because that was under the old TSP system with notarized paper forms mailed or faxed around. In the new system, all you can check now is if the Vanguard account is created and then when the money shows up in your Vanguard account.

The error was in how Vanguard processed the incoming paperwork and check from TSP. I don't see how the new process on the TSP side changes anything at Vanguard.

[Claudia Whitten]

I would NOT suggest emptying the TSP plan. It has access to the unicorn G fund, which you will not get anywhere else, including Vanguard. TSP also allows you to roll other Traditional assets into the plan, EVEN if you are no longer a Federal employee.

Don't shoot yourself in the foot by exiting TSP.

I agree with this. The G fund saved many people's bacon (including mine) during 2022, when both stocks and bonds cratered. What other vehicle did that or could do that in the future, if inflation spikes up again and interest rates must rise?

If you're retired, use the L Income fund or another appropriate fund and quit worrying about whether to transfer money. If you want money in Vanguard, put extra funds there.

Retirement sometimes gives people too much time to fiddle with their money. Leave it alone and live off the proceeds.

[Parkinglotracer]

In NY and over 59 1/2 TSP withdrawals are state tax free as is a military retirement and Social Security and 20K of IRA withdrawals per person per year. That might be one reason not to roll over the TSP money if you live there.

[rkhusky]

Not really relevant because that was under the old TSP system with notarized paper forms mailed or faxed around. In the new system, all you can check now is if the Vanguard account is created and then when the money shows up in your Vanguard account.

The error was in how Vanguard processed the incoming paperwork and check from TSP. I don't see how the new process on the TSP side changes anything at Vanguard.

Because there are less opportunities to check things. Under the old system, where the TSP required Vanguard to fill out TSP paper forms, I had Vanguard send them to me, so I could check them out before faxing to the TSP.

[MnD]

Also you can just leave what you want as a core holding for tax deferred fixed income in the G fund and roll over the rest to Vanguard.
It doesn't have to be an either or position.

Something the TSP doesn't have is a corporate bond fund which isn't a bad pairing with the TSP G fund.
The F fund or another total bond fund is 2/3rds uncompensated risk if you have access to the G fund.
2/3rds G fund and 1/3 something like VCIT has a much more favorable yield to risk/volatility profile.

[delamer]

I would NOT suggest emptying the TSP plan. It has access to the unicorn G fund, which you will not get anywhere else, including Vanguard. TSP also allows you to roll other Traditional assets into the plan, EVEN if you are no longer a Federal employee.

Don't shoot yourself in the foot by exiting TSP.

I agree with this. The G fund saved many people's bacon (including mine) during 2022, when both stocks and bonds cratered. What other vehicle did that or could do that in the future, if inflation spikes up again and interest rates must rise?

If you're retired, use the L Income fund or another appropriate fund and quit worrying about whether to transfer money. If you want money in Vanguard, put extra funds there.

Retirement sometimes gives people too much time to fiddle with their money. Leave it alone and live off the proceeds.

There are perfectly valid reasons for rolling some funds out of the TSP into a Traditional IRA. Nothing to do with fiddling.

In my case, the ability to do Roth conversions and QCDs was behind the transfer.

[Claudia Whitten]

In my case, the ability to do Roth conversions and QCDs was behind the transfer.

I just got an email from TSP saying that in-plan Roth conversions are available as of 2026.

The G fund, by the way, is going to be invaluable if there's another inflation spike, driving bond and stock prices lower at the same time, which looks entirely likely. The G fund is an asset class that no one should give up on entirely, IMO.

[HueyLD]

In my case, the ability to do Roth conversions and QCDs was behind the transfer.

I just got an email from TSP saying that in-plan Roth conversions are available as of 2026.

Does the email indicate that in-plan conversion will be allowed if you are no longer employed?

[Claudia Whitten]

Does the email indicate that in-plan conversion will be allowed if you are no longer employed?

viewtopic.php?t=443816

[delamer]

In my case, the ability to do Roth conversions and QCDs was behind the transfer.

I just got an email from TSP saying that in-plan Roth conversions are available as of 2026.

The G fund, by the way, is going to be invaluable if there's another inflation spike, driving bond and stock prices lower at the same time, which looks entirely likely. The G fund is an asset class that no one should give up on entirely, IMO.

For most people, I agree that it is a good idea to keep some money in the TSP rather than closing it our altogether. I have a lot of money in the G Fund.

I was pushing back against the idea that “Leave it alone” is always good advice.

BTW, income taxes on conversions will not ge able to be paid from TSP funds. While it is almost always best to taxes from other funds, even when doing the conversion from an IRA, it is a limitation on the intra-TSP conversion.

[navyasw02]

Over the years I've heard lots of people slobber over the G fund and the low fees of the TSP. That was great advice 10+ years ago, but my cash holdings at Fidelity go into SPAXX that yields more with the same safety as the G fund and my fidelity funds have lower fees than TSP with more options. Furthermore, both withdrawal options and user interfaces for brokerages like fidelity and vanguard are up to modern standards. TSP is overrated.

[delamer]

Over the years I've heard lots of people slobber over the G fund and the low fees of the TSP. That was great advice 10+ years ago, but my cash holdings at Fidelity go into SPAXX that yields more with the same safety as the G fund and my fidelity funds have lower fees than TSP with more options. Furthermore, both withdrawal options and user interfaces for brokerages like fidelity and vanguard are up to modern standards. TSP is overrated.

SPAXX: 1.43%, 10-year average annual return
G Fund: 2.49%, 10-year average annual return

The only period where SPAXX had superior returns was over the last year:

https://fundresearch.fidelity.com/mutua ... /31617H102

https://www.tsp.gov/funds-individual/g-fund/

[lakpr]

Over the years I've heard lots of people slobber over the G fund and the low fees of the TSP. That was great advice 10+ years ago, but my cash holdings at Fidelity go into SPAXX that yields more with the same safety as the G fund and my fidelity funds have lower fees than TSP with more options. Furthermore, both withdrawal options and user interfaces for brokerages like fidelity and vanguard are up to modern standards. TSP is overrated.

First off a disclaimer -- I am not a Federal employee, no access to TSP. But you are seriously underestimating the value of G fund. SPAXX is a money market fund whose yields are correlated to the FOMC short term rates, which were a pittance four years ago and even now are dropping. The G fund, on the other hand, yields intermediate term rates BUT without the risk of principal loss. You only need to take a look at 2022 to realize its value and why it is so highly regarded. EVERY OTHER supposedly safe havens, be it bond funds or TIPS or corporate bonds or nominal treasuries, ALL tanked, some more than the other. G fund stood there like a rock.

With our president elect promising tariffs, inflation is just around the corner, and we will revisit this conversation an year from now how G fund fares vs Fidelity offerings.

Edited to add: TSP life cycle funds also incorporate 90% of their respective fixed income portfolio with G fund. For damn good reason. The expense ratios of the C, S, I funds are only marginally more expensive than Fideity offerings. Which would amount to an extra $150 per year on a million dollar portfolio (0.03% C vs 0.015% FXAIX sample comparison). I will look at it as a $150 insurance premium that I will never have to suffer a 17% or worse loss in that part of my portfolio that I want to keep absolutely safe.

[pahkcah]

Edited to add: TSP life cycle funds also incorporate 90% of their respective fixed income portfolio with G fund. For damn good reason. The expense ratios of the C, S, I funds are only marginally more expensive than Fideity offerings. Which would amount to an extra $150 per year on a million dollar portfolio (0.03% C vs 0.015% FXAIX sample comparison). I will look at it as a $150 insurance premium that I will never have to suffer a 17% or worse loss in that part of my portfolio that I want to keep absolutely safe.

Current expense ratios for TSP funds can be found here: https://www.tsp.gov/tsp-basics/expenses-and-fees/
The current C Fund ER is 0.048%.

OP: I moved the majority of my TSP account to Fidelity, leaving enough in the G Fund to keep the account open. I had been investing 80% in the C Fund and 20% in the S Fund to mimic VTI. Rather than continue to do this, I just decided to go to Fidelity and invest the funds in VTI.

If you are going to rollover anything to Vanguard (or any other financial firm), please be aware that you must register the firm with the TSP at least 7 days prior to executing a rollover. If you are married and retired under FERS, you will need your spouse's approval. CSRS retirees are not required to obtain approval from their spouses (the TSP board provides a notification to spouses of CSRS retirees).

Here's a good video that explains how to do a rollover:
https://youtu.be/Fyu-kG4e_lk

[oncorhynchus]

Last time I did a TSP to Vanguard rollover it was with the hardcopy forms before they upgraded the website. Now I want to do another one, but have some nitpicky questions about the details of filling out the online forms.

When filling out the Add Financial Institution Form on the TSP website, and in reference to Vanguard's Rollover Instructions:

1. What should I put in the Institution Name field, "Vanguard" or "Vanguard FBO <my name>"?

2. Presumably for the Institution Address I use the "Regular Mail" address?

Thanks in advance,

o

[rkhusky]

Last time I did a TSP to Vanguard rollover it was with the hardcopy forms before they upgraded the website. Now I want to do another one, but have some nitpicky questions about the details of filling out the online forms.

When filling out the Add Financial Institution Form on the TSP website, and in reference to Vanguard's Rollover Instructions:

1. What should I put in the Institution Name field, "Vanguard" or "Vanguard FBO <my name>"?

2. Presumably for the Institution Address I use the "Regular Mail" address?

Thanks in advance,

o

Use Vanguard, unless Vanguard tells you to use something different.

Use the address that Vanguard tells you to use. I thinks it’s in Texas.

For both of the above, tell Vanguard that you are sending money to them and the approximate amount. There’s a button for that on the Vanguard website. They will give you the above info.