PrepperGoldIRA Staff | Updated
Quick Summary
A TSP to gold IRA transfer moves federal retirement funds into physical precious metals through a self-directed IRA. Direct rollover avoids 20% withholding. Active employees under 59½ cannot transfer. Age-based withdrawals available at 59½ with no frequency limit beyond once every 30 days. Traditional TSP goes to traditional Gold IRA tax-free. Roth conversions trigger income tax. Process takes 2 to 4 weeks through approved custodians.
The 58-year-old federal employee who watched his TSP balance grow 20% while groceries doubled. That is not wealth. That is currency failure in slow motion.
You served 26 years. Trusted the system. Now the system’s money erodes faster than your retirement can grow.
The question is not whether you should diversify. The question is whether you can afford not to.
You showed up for 26 years. Contributed every paycheck. Watched your TSP climb past $380,000.
Then you filed for a TSP to gold IRA transfer. Chose the wrong rollover method. The TSP withheld 20% before you saw a dime.
That is $76,000 sent to the IRS. You had 60 days to replace it. You did not have $76,000 sitting in a checking account. Nobody does.
Now you owe income tax on the full amount. Plus a 10% early withdrawal penalty if you are under 59½. One form. One wrong checkbox. A five-figure mistake that cannot be reversed.
This article exists so that does not happen to you.
Table of Contents
- The TSP Transfer Rules FERS Employees Get Wrong
- Step-by-Step Direct Rollover Process
- Traditional vs. Roth TSP Rollover Tax Consequences
- In-Service Withdrawal Eligibility (Age 59½ Rule)
- The New 2026 Roth In-Plan Conversion Option
- Fees and Costs Federal Employees Face
- Three FERS-Specific Rollover Timing Strategies
- Frequently Asked Questions
A TSP to gold IRA transfer is the process of moving Thrift Savings Plan funds into a self-directed individual retirement account that holds IRS-approved physical precious metals. For FERS employees, this transfer comes with specific rules the TSP does not advertise and HR does not explain. Getting any of them wrong triggers taxes, penalties, or both.
This guide covers the exact restrictions FERS civilian employees face when moving TSP funds to a Gold IRA. It walks through the direct rollover process step by step. It explains the tax consequences of traditional vs. Roth TSP rollovers. And it identifies the three timing mistakes that cost federal employees thousands of dollars every year.
If you are new to the concept of a Gold IRA, start with our complete Gold IRA overview first. For the broader picture of how federal employees navigate precious metals transfers, see our federal employee gold IRA guide.
The TSP Transfer Rules FERS Employees Get Wrong
The TSP is a government retirement plan defined under Section 414(d) of the Internal Revenue Code. It is not a 401(k), even though it functions like one. That distinction matters because TSP rollovers follow federal rules that override some standard IRA transfer guidance you find online.
Here is what trips up FERS employees most often.
You Cannot Hold Gold Inside the TSP
The TSP offers five individual funds: C, S, I, F, and G. It also offers Lifecycle (L) funds that blend these five. None of them hold physical assets. The mutual fund window introduced in 2022 charges $55 annually plus $28.75 per trade. It still limits you to 25% of your balance. And it still excludes physical precious metals.
If your goal is physical gold in a retirement account, the only path is transferring those funds into a self-directed IRA with a custodian that supports precious metals.
Here is the hard truth: The TSP cannot hold the one asset class that has survived every currency crisis in recorded history. Five funds. Zero physical assets. That is all the TSP gives you to work with.
Eligibility Depends on Employment Status
Your ability to move TSP money depends on where you stand with federal service.
Separated or retired: Full rollover access. You can move part or all of your TSP balance to a Gold IRA with no employment restrictions.
Active, age 59½ or older: Eligible for age-based in-service withdrawals under the TSP Modernization Act. You can take partial withdrawals as often as every 30 days.
Active, under 59½: Limited to financial hardship withdrawals, which are not eligible for rollover. You must wait until separation or age 59½.
Direct vs. Indirect Rollovers Are Not the Same
This is the single most expensive mistake federal employees make. The TSP offers two rollover paths. Only one avoids immediate taxation.
| Factor | Direct Rollover | Indirect Rollover |
|---|---|---|
| How funds move | TSP sends check directly to Gold IRA custodian | TSP sends check to you |
| Tax withholding | $0 withheld | 20% mandatory federal withholding |
| Deadline | None | 60 days to deposit full amount into IRA |
| Penalty risk | None if executed correctly | 10% early withdrawal penalty if under 59½ and deadline missed |
| Frequency limit | No limit on direct rollovers | Subject to one-per-year rule restrictions |
⚠ Warning: If you choose an indirect rollover and cannot replace the 20% withholding from personal funds within 60 days, the IRS treats the shortfall as a taxable distribution. On a $400,000 TSP balance, that is $80,000 withheld and potentially taxed as income. Choose the direct rollover. Always. For a detailed breakdown of deadline risks, see our 60-day IRA rollover deadline failures guide.
The bottom line: One wrong checkbox on your TSP rollover form costs you $80,000 in withholding you cannot recover.
For a detailed walkthrough of the general rollover process, see our 401(k) to Gold IRA rollover guide. The mechanics are similar, but TSP-specific forms differ.
Step-by-Step TSP to Gold IRA Direct Rollover Process
A direct rollover keeps the IRS out of the transaction. The money goes from the TSP to your new custodian without you touching it. Here are the six steps, in order.
Choose a Precious Metals Dealer First
This is where most people get confused. You do not start by choosing a custodian. You start by choosing a precious metals dealer, which is the company you will actually work with throughout the process.
Companies like Augusta Precious Metals, Goldco, and others each work with their own preferred custodians. When you sign up with a dealer, they coordinate the custodian relationship on your behalf. The custodian holds the account. The depository stores the metals. But the dealer is your primary point of contact for education, purchasing decisions, and ongoing service.
You can technically request your own custodian, but most people follow the dealer’s recommendation because the established relationship means faster processing and fewer paperwork headaches. Since the dealer is who you will communicate with throughout the entire transaction chain, it makes sense to start there. See our precious metals company comparison to evaluate your options best gold IRA Company Review. If you want to understand the custodian side independently, you can check out the custodian comparison here best gold IRA Custodians Review.
Decide Traditional, Roth, or Both
If your TSP has both traditional and Roth balances, they must go to matching IRA types. Traditional TSP rolls to a traditional IRA. Roth TSP rolls to a Roth IRA. Mixing them triggers an immediate taxable event. Your Gold IRA custodian should be able to receive both types.
Complete Form TSP-70 or TSP-77
Separated employees use Form TSP-77. Active employees requesting an age-based in-service withdrawal use the TSP website directly. Specify a direct rollover to your new custodian. Include the custodian name, address, and your new IRA account number. You can access the forms, manage your account, and track your withdrawal status at tsp.gov.
TSP Issues a Check to Your Custodian
The TSP processes rollovers by issuing a U.S. Treasury check. It is mailed to the receiving custodian. This typically takes 7 to 10 business days after the TSP processes your request. Track the status through My Account at tsp.gov.
In plain English: The entire transfer takes 2 to 4 weeks from paperwork to physical metals in storage.
Select Your Metals
Once the custodian receives the funds, you work with your dealer to chose which IRS-approved metals to purchase. American Gold Eagles, American Gold Buffalos, and gold bars meeting .9950 fineness from approved refiners all qualify. Your dealer handles the purchase and coordinates with the custodian to arrange insured depository storage for the actual gold.
Confirm Depository Storage
IRS rules require Gold IRA metals to be stored in an approved depository. You do not store them at home. Any company suggesting home storage is violating IRS regulations. Get written confirmation from your custodian that metals are deposited and insured.
Traditional vs. Roth TSP Rollover Tax Consequences
FERS employees often have both traditional and Roth contributions in their TSP. Each has different tax treatment on rollover, and confusing them is expensive.
Traditional TSP to Traditional Gold IRA
No taxes owed at the time of rollover. Contributions and earnings were made pre-tax. They remain tax-deferred in the traditional Gold IRA. You pay taxes when you take distributions in retirement.
Roth TSP to Roth Gold IRA
No taxes owed at the time of rollover. Contributions were made with after-tax dollars. Qualified distributions in retirement come out tax-free, including earnings, as long as the Roth account has been open at least five years and you are 59½ or older.
Traditional TSP to Roth IRA (Conversion)
This triggers a taxable event. The full amount converted is added to your taxable income for the year. There is no 10% penalty on conversions, but the income tax hit can be significant. A $200,000 conversion on top of your federal salary could push you into a higher bracket.
Employer match warning: All agency matching contributions go into the traditional TSP, regardless of whether you elected Roth. If you want to roll your entire balance to a Roth IRA, the traditional portion (including all matching) is taxed as income during the conversion year. Plan accordingly with your tax advisor.
Run the numbers before you convert: A $300,000 traditional TSP to Roth conversion could push you from 22% to 32% tax bracket in the conversion year. That is real money lost to the IRS that you could have phased over two or three years.
For a deeper comparison of tax treatment across IRA types, read our IRA vs. Roth vs. Gold IRA review.
In-Service Withdrawal Eligibility (Age 59½ Rule)
Before the TSP Modernization Act of 2017 (Public Law 115-84), active FERS employees had one shot at an in-service withdrawal. Use it once, even for an emergency, and you forfeited future access to your own money until retirement.
That restriction is gone.
FERS employees age 59½ or older who are still actively employed can now take partial age-based in-service withdrawals as often as every 30 days. No penalties. No mandatory distribution of the entire balance. No one-and-done restriction.
This matters because it means you do not have to wait until separation from service. If you are 59½ and still on the federal payroll, you can move a portion of your TSP into a Gold IRA while continuing to work and continuing to receive the agency match on future contributions.
Key detail: An in-service withdrawal does not end your TSP participation. You keep contributing. Your agency keeps matching. You simply move a portion of existing funds into a self-directed IRA for diversification purposes. Most financial advisors suggest keeping 60 to 70% in traditional TSP funds and considering 10 to 30% in physical metals for diversification.
You do not have to wait for retirement to start defending what you built. Age 59½. Still on the payroll. Still getting the match. You can move a portion now and keep building the rest.
If you are under 59½ and still employed, your only TSP withdrawal option is a financial hardship withdrawal. Hardship withdrawals are not eligible for rollover. They come with income tax and possible penalties. They are not a path to a Gold IRA.
The New 2026 Roth In-Plan Conversion Option
Starting January 28, 2026, the TSP introduced Roth in-plan conversions. This is a new feature that did not exist before. Understanding it matters for your transfer timing.
What Changed
You can now convert money from your traditional (pre-tax) TSP balance to your Roth (after-tax) TSP balance directly within your TSP account. Previously, converting to Roth required rolling money out to a traditional IRA, then converting to a Roth IRA outside the TSP. That extra step is no longer necessary for in-plan conversions.
What Else Changed in 2026
SECURE 2.0 introduced a mandatory Roth catch-up rule. Starting January 1, 2026, FERS employees age 50 or older who earned more than $145,000 in Social Security wages during 2025 must make catch-up contributions to the Roth TSP. They can no longer direct catch-ups to the traditional TSP.
For 2026, the standard TSP contribution limit is $24,500. The catch-up limit for employees age 50 and older is $8,000 (total $32,500). Employees age 60 to 63 get a higher catch-up limit of $11,250 (total $35,750).
How This Affects Your Transfer Decision
If you are building up a larger Roth TSP balance through mandatory or voluntary Roth contributions, a future rollover to a Roth Gold IRA becomes more tax-efficient. You already paid taxes on the contributions. Rolling to a Roth Gold IRA means your physical metals grow tax-free and come out tax-free in retirement.
The shift is already happening. The 2026 Roth rules may push you toward Roth rollovers instead of traditional ones. If you are being forced into Roth catch-ups anyway, that changes the math on which IRA type makes sense for your transfer.
Conversely, if you are being pushed into Roth catch-ups and would prefer to keep those dollars in pre-tax accounts, the in-plan Roth conversion adds another moving part to consider. Work with a tax professional to model the numbers before making any transfer decisions.
See What Inflation Is Doing to Your TSP Balance
Use this calculator to compare your TSP investment growth against actual purchasing power loss. Enter your current balance, expected return, and inflation rate to see the real impact before making transfer decisions.
Investment Growth & Buying Power Calculator
Compare how your money would have grown in Gold IRA, Stocks, or Cash over time, and see what your actual buying power would be today after accounting for inflation.
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Fees and Costs Federal Employees Face in Gold IRA Transfers
The TSP is one of the lowest-cost retirement plans in existence. Annual expense ratios range from 0.049% to 0.055% across all funds. That is roughly $25 per year on a $50,000 balance. When you complete a transfer to a Gold IRA, the fee structure changes.
| Fee Type | Typical Range | Notes |
|---|---|---|
| Account setup | $0 to $50 | Many custodians waive this for transfers above $25,000 |
| Annual custodian fee | $75 to $300 | Covers IRS reporting and account maintenance |
| Storage fee | $100 to $300/year | Segregated storage costs more than commingled |
| Dealer markup | 2% to 5% over spot | Varies by product; coins cost more than bars per ounce |
| Selling/liquidation fee | $0 to $50 | Some custodians offer zero-fee buyback |
These fees are higher than the TSP. That is a fact. The question is whether the diversification into physical metals justifies the cost for your specific situation. Nobody should move 100% of their TSP into a Gold IRA. The math does not work for most people at that allocation level.
Fees and fine print: Expect $200 to $600 annually in custodian and storage fees versus $50 annually in the TSP. The question is not whether Gold IRA fees are higher. They are. The question is whether holding physical metals outside the paper system is worth the difference to you.
For a detailed breakdown of custodian fees and service quality, visit our best Gold IRA custodians comparison.
Three FERS-Specific Rollover Timing Strategies
When you initiate the transfer matters as much as how you do it. FERS employees have three distinct timing windows, each with different advantages.
Strategy 1: In-Service Partial Transfer at 59½
If you are still working and hit 59½, you can begin moving money without separating from service. This lets you diversify gradually while your agency continues matching new contributions. You keep building the TSP and move existing funds into metals at the same time.
Best for: Employees who want diversification now but are not ready to retire.
Strategy 2: Transfer at Separation During Low-Income Year
If you separate from service and have a gap before pension payments begin, your taxable income may drop temporarily. This is the window for Roth conversions at a lower tax rate. Convert a portion of traditional TSP to a Roth Gold IRA while your income is suppressed.
Best for: Employees who retire mid-year or take early retirement with delayed annuity payments.
Strategy 3: Phased Transfers Across Tax Years
You do not have to move everything at once. Spread the rollover across two or three calendar years to manage your tax bracket. Roll $100,000 in December, another $100,000 in January. Two different tax years. Two smaller income events instead of one large one.
Best for: Large TSP balances above $300,000 where a single rollover would push into higher brackets.
Timing is not a detail. It is a strategy. The wrong month costs thousands. The right month saves them. Work with a tax professional before you pick a date.
Proposed FERS changes to watch: Congress has advanced proposals that would increase FERS contributions from 0.8% to 4.4% for pre-2013 hires (phased in starting 2026), shift annuity calculations from high-3 to high-5, and eliminate the FERS supplement for new retirees. These are proposals, not law. But if enacted, they change the retirement math for every FERS employee considering precious metals diversification.
Your TSP Transfer Decision Starts Here
Access interactive tools including allocation calculators, readiness quizzes, and financial planning resources built specifically for federal employees navigating the rollover process.
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The GS-13 at the VA has been watching the Fork in the Road emails. She wonders if she should have taken the deal.
Her TSP sits in the L2035 fund. She is 56. She needs this money to last 30 years.
Nobody at HR explained her rollover options. Nobody told her the TSP cannot hold the one asset class that has survived every currency crisis in recorded history.
She did not choose government work because it paid well. She chose it because the benefits made the lower salary worth it. Now those benefits are on the table in a reconciliation bill.
The question is not whether the system will change. The question is whether her transfer happens before it does.
Frequently Asked Questions
Can I transfer my TSP to a Gold IRA while still employed?
Yes, if you are 59½ or older. The TSP Modernization Act allows age-based in-service withdrawals with no frequency limit beyond once every 30 days. You can move a portion of your TSP into a Gold IRA while remaining on the federal payroll and continuing to receive agency matching contributions.
Is a TSP to Gold IRA rollover taxable?
A direct rollover from traditional TSP to a traditional Gold IRA is not taxable. A direct rollover from Roth TSP to a Roth Gold IRA is also not taxable. However, converting from traditional TSP to a Roth Gold IRA triggers income tax on the converted amount. An indirect rollover that misses the 60-day deadline becomes a taxable distribution with potential penalties.
What gold products are IRS-approved for a Gold IRA?
The IRS requires gold to meet .995 fineness (99.5% purity) for IRA inclusion. American Gold Eagles are the exception and are approved despite .9167 fineness. Other approved products include American Gold Buffalos (.9999), Canadian Gold Maple Leafs (.9999), and gold bars from COMEX or LBMA-approved refiners meeting the .995 standard.
How long does a TSP rollover take?
The TSP typically processes rollover requests within 7 to 10 business days. The check is mailed to your receiving custodian. Allow an additional 3 to 5 business days for mail delivery and custodian processing. Total time from request to metals purchase is usually 2 to 4 weeks.
Can I do a partial TSP rollover?
Yes. You do not have to move your entire TSP balance. Partial rollovers are common and often recommended. This lets you maintain diversification across TSP funds and physical metals. Most advisors suggest keeping a significant portion in the TSP for its low fees and moving only the percentage you want in physical metals.
Do I lose the government match if I roll over my TSP?
If you are separated from service, matching contributions have already stopped. The match on past contributions stays in your account and rolls over with the rest. If you do an in-service withdrawal at 59½, your agency continues matching new contributions going forward. You only lose future matching if you leave federal employment.
What is the difference between the TSP and a Gold IRA?
The TSP is a government-managed defined contribution plan with five index funds and Lifecycle funds. A Gold IRA is a self-directed individual retirement account that holds IRS-approved physical precious metals. The TSP has lower fees but limited investment options. A Gold IRA has higher fees but allows physical asset diversification outside paper markets. See our Gold IRA vs. stocks vs. cash comparison for a detailed breakdown.
The federal employee with 30 years in, watching his TSP balance grow while wondering if it will buy half as much when he finally retires.
You served the government. The government’s money should not erode your retirement.
This is not about getting rich. It is about defending what you already built.
A TSP to gold IRA transfer offers federal employees a path to physical precious metals diversification outside the limited TSP investment options. The process requires careful attention to direct rollover procedures, tax consequences, and eligibility requirements. While Gold IRA fees exceed TSP costs, the diversification into physical assets may justify the expense for employees concerned about currency devaluation and retirement security. Work with qualified professionals to determine if this transfer aligns with your specific financial situation and retirement timeline.
Additional Resources
- tsp.gov (Official TSP Website: forms, account management, and withdrawal tracking)
- OPM Retirement Services (Federal employee retirement information)
- IRS Rollover Rules (Official IRS guidance on rollovers)
Continue Reading: Federal Employee Retirement Series
- Federal Employee Gold IRA: TSP Transfer Rules & Rollover Mistakes (Pillar)
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- You are here: TSP to Gold IRA Transfer Restrictions & Federal Employee Mistakes
- TSP to Gold IRA: Military Legacy & Survivor Benefits
- 60-Day IRA Rollover Deadline Failures & Extension Denials
- 403b to Gold IRA Conversion Errors & Employer Restrictions
Disclaimer: This article is for educational purposes only and does not constitute investment, tax, or legal advice. Gold and precious metals investments carry risk, including possible loss of principal. TSP rollovers involve complex rules and potential tax consequences. Past performance is not indicative of future results. Nobody can accurately predict where precious metals prices will go. Consult a qualified financial advisor and tax professional before making any investment or rollover decisions. PreppersGoldIRA.com may earn commissions through affiliate partnerships at no additional cost to you.