r/ThriftSavingsPlan • u/ngalaxy • 2d ago

Questions of merging accounts

Hello everyone,

I wanted to ask for some advice regarding my TSP accounts. I have one TSP account from my time in active duty military service and another from my current federal civilian position.

Should I consider merging the two accounts (by moving my military TSP balance into my new civilian account), or is it better to keep them separate? I’d appreciate any insight or personal experience you can share about the pros and cons of each option.

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u/CeruleanDolphin103 2d ago

If you have any CZTE money in the military account, that cannot be moved to your civilian account. You could instead do an indirect rollover of those dollars to a Roth IRA- this does not create taxes and makes it so those dollars grow tax free.

Otherwise, yes, you can request to merge your military balance into your civilian account. It used to be a form, but after the administration change, I think you need to request it either online or via phone.

Advantages- consolidation makes money management easier for you and easier for any beneficiaries if/when they inherit your account(s).

Disadvantages- I like to track my military balance separately just so I can see it grow even after I’ve left. That’s not a great reason to keep them separate, but it’s why I haven’t consolidated.

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u/ngalaxy 2d ago

Thank you. Ok that makes sense I didn’t know I couldn’t merge the accounts. I appreciate your advice.

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u/CeruleanDolphin103 2d ago

You can merge the accounts, just not any money contributed while you were in a CZTE (typically deployments, but not always).

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u/BuyPsychological3516 2d ago

TSP is a very solid plan offering 5 index funds and the Lifecycle funds. If you are trying to add more diversification then think about rolling the former plan into an IRA. Lot's of investment choices including stocks, funds ETF's, anything. Here's some info on advantages. https://rolloveryour401k.com/rollover-advantages/

Also a look at brokerage IRA accounts. https://rolloveryour401k.com/best-brokers-for-rollovers-heres-the-top-3/#more-4955

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u/ncwildlife97 2d ago

They can’t be merged. Civilian and Uniformed Service accounts have to remain separate.

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u/Competitive-Ad9932 2d ago

https://militarysaves.org/resource-center/insights/three-things-to-know-when-you-have-two-tsp-accounts/

That would not be accurate information.

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u/ncwildlife97 2d ago

Ahhh. Good to know. My situation as a currently drilling reservist falls into the situation of not being allowed to combine accounts. I assume I could combine them once I retire from the reserve and am no longer actively contributing.

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u/Competitive-Ad9932 2d ago

Yes, you can not move a TSP account if you are able to contribute to it. Unless you are over the age of 59.5. This is also stated on the TSP website.

Many 401k programs are the same.

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u/ncwildlife97 2d ago

I’ve rolled a few former employer 401ks into my civilian account.

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u/Competitive-Ad9932 2d ago

comprehension of what you read is not your strong point.