TSP rollover to a Roth | Ed Slott and Company, LLC

TSP rollover to a Roth

Is there any advantage of rolling a government thrift savings plan first into a traditional IRA and then converting to a Roth rather than converting directly to a Roth?

No advantage. Generally, if you have basis in either the TIRA or the qualified plan, you would want to convert the plan with the highest % of basis first. That gets more dollars into the Roth per tax dollar paid for the conversion. Qualified plans like the TSP may also not allow incremental distributions or conversions, so you may be able to control the amount of your conversion more easily by rolling it first to a TIRA account. If neither of the above issues is a factor, then it does not make much difference, although the direct conversion is a one step process rather than a two step process.

Thank you.

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