Can you roll over money from your TSP to a Roth IRA?

Question

If I leave my current job...that has a TSP retirement savings plan, it's basically a 401 K, can I roll that over into a Roth IRA? If not....if I take it out....it will get taxed....and then when I put it into a roth IRA will it get taxed again.....causing it to be taxed twice?

Answer 1

First, you must roll it into a traditional IRA. Then, you can transfer it into a Roth IRA. Upon the transfer into the Roth, it will be taxed as ordinary income, but the funds will then grow tax-free. Depending on how soon you intend to fully retire and begin taking distributions, this may or may not make sense. Most financial advisors or planners can help you with the calculations at no charge.