TSP to Schwab IRA Rollover

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BHamTallMan
Posts: 9
Joined: Mon Jul 05, 2021 9:19 pm

TSP to Schwab IRA Rollover

Post by BHamTallMan »

I’m retiring soon and would like to rollover some of my TSP money into a Schwab IRA. Several years ago, the TSP website was revised and it was a disaster. People were saying it was taking two weeks for the rollover to be completed, and the TSP was mailing paper checks.

Has anyone done a TSP to IRA rollover lately? If so, was the process still a nightmare? I anticipate having to move money between the two accounts annually and am wondering about that process as well.

Thanks for any insight.
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pahkcah
Posts: 425
Joined: Tue Dec 15, 2015 9:50 pm

Re: TSP to Schwab IRA Rollover

Post by pahkcah »

I just executed a rollover, but it was to an IRA at Fidelity. I was told to expect the process to take up to 10 business days. I requested the withdrawal on April 19. The withdrawal was sent out via US mail on April 23. It was received and entered into my Fidelity IRA on April 28th. In terms of business days, it took 6 days total.

Please be aware that the destination site (in my case Fidelity) must be added to your TSP account at least 7 days before the rollover is executed. I had moved all of my TSP portfolio to the G Fund before executing the rollover. If you are FERS and married, you will need to provide approval from your spouse. CSRS TSP account holders do not require spousal approval.

Here'a a link to a video that covers a TSP withdrawal to an outside IRA:
https://www.google.com/search?q=tsp+rol ... 4e_lk,st:0
chemocean
Posts: 1612
Joined: Mon Dec 19, 2016 8:45 pm

Re: TSP to Schwab IRA Rollover

Post by chemocean »

pahkcah wrote: Tue May 14, 2024 11:32 pm I just executed a rollover, but it was to an IRA at Fidelity. I was told to expect the process to take up to 10 business days. I requested the withdrawal on April 19. The withdrawal was sent out via US mail on April 23. It was received and entered into my Fidelity IRA on April 28th. In terms of business days, it took 6 days total.

Please be aware that the destination site (in my case Fidelity) must be added to your TSP account at least 7 days before the rollover is executed. I had moved all of my TSP portfolio to the G Fund before executing the rollover. If you are FERS and married, you will need to provide approval from your spouse. CSRS TSP account holders do not require spousal approval.

Here'a a link to a video that covers a rollover from the TSP to an outside IRA:
https://www.google.com/search?q=tsp+rol ... 4e_lk,st:0
Second the notion that setting up the external link between TSP and your Schwab IRA account, which takes 7 days, is the key having this transfer successful. I did a transfer from TSP to Schwab last year with no problem.
cvn74n2
Posts: 143
Joined: Sat Aug 01, 2009 3:09 am

Re: TSP to Schwab IRA Rollover

Post by cvn74n2 »

After reviewing the video at the link, it appears the distribution mechanisms remain the same from when I rolled over to Schwab 2 years ago (i.e. via paper check in the US Mail). There is no electronic transfer available.

FWIW, after a poor experience with Vanguard losing our account paperwork twice in spite being certified with return receipts, I opted to have the rollover check mailed to me directly. Once received, I hand-walked it into my local Schwab office which credited my account immediately (no hold).

Finally, if you have any tax free Combat Zone contributions embedded in your Traditional TSP account, you might want to consider having that money paid to you directly to avoid having to account for it yearly in your rollover IRA as a non-deductible contribution. Of note, whatever the overall percentage of your Traditional TSP account has Combat Zone Tax Exclusion contributions, they will be included in the distribution - full or partial (e.g., 10% overall = 10% in the distribution).
hamhocs
Posts: 127
Joined: Mon Feb 17, 2020 7:31 am

Re: TSP to Schwab IRA Rollover

Post by hamhocs »

I did one in March from TSP to Schwab for the Roth portion only. I had the check sent to me. I didn't have to wait the 7 days that way. It was made out to Schwab with FBO "my name". I took it into a Schwab office and it was immediately available. I am now getting ready to do half of my traditional. I asked Schwab to match a bonus from Citi (2K for 500K) and was approved and applied to my new IRA account. I thought about having it sent directly to them, but I do have a Schwab office nearby so I'll just have it sent to me again.
Fishing50
Posts: 679
Joined: Tue Sep 27, 2016 1:18 am

Re: TSP to Schwab IRA Rollover

Post by Fishing50 »

I rolled over TSP to Schwab with the new portal in 2022 with no problems. :D
https://www.bogleheads.org/forum/viewt ... p?t=382265
Retired Military Officer. 80% equites / 20% bonds for life, ZERO emergency fund, 100% taxable in equities (dividends in cash), 33% taxable, 30% Roth, 37% tax deferred. Gone Fishing At 52yrs old!
ChrisC
Posts: 1492
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

Re: TSP to Schwab IRA Rollover

Post by ChrisC »

Not a TSP to Schwab rollover, but I suspect the process might be similar to what I encountered with TSP to Fidelity transfers/rollovers. I did two transfers/rollovers under the new TSP platform, one in March 2023 and the other in April 2024 -- both were Roth conversions to a Fidelity Roth IRA. And both were far more simple than transfers/rollovers I had previously done under the old TSP platform. The first one was a direct transfer of traditional TSP funds to my Fidelity Roth IRA, which took less than 7 days to move funds from TSP into the Fidelity Roth IRA -- this was done by TSP sending a check to Fidelity and then Fidelity depositing the funds into my Roth IRA.

In April of this year, I decided to do an indirect rollover/conversion of TSP funds (with TSP Federal income tax withholding of 20% of the distribution) to my Fidelity Roth IRA. For the indirect rollover, the TSP funds were deposited in my checking account (and this took less than 3 business days from request to deposit) and I later rolled over the entire distribution amount (which included the amount withheld) to Fidelity. I completed the indirect rollover/conversion within 30 days of the TSP distribution, although I was entitled to complete it within 60 days of the distribution as an indirect rollover. For Fidelity to complete this indirect rollover, I had to call up a Fidelity representative to pull/ACH the funds from my checking account at Navy Federal Credit Union which was linked to my Fidelity accounts, including my Roth IRA.
rkhusky
Posts: 18259
Joined: Thu Aug 18, 2011 8:09 pm

Re: TSP to Schwab IRA Rollover

Post by rkhusky »

Here is my experience with rolling over from the TSP to Vanguard last year. A few snags on the TSP side, which were resolved. Flawless on the Vanguard side.

viewtopic.php?p=7514051#p7514051

Seems to take about a week from TSP debit to buying funds at the new brokerage.
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