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My wife has two TSPs, one from military service and one from her work as a civil servant. Now that she is no longer military or civil service, I understand we can roll one of these into the other. Is there any advantage to keeping one vs. the other?

Situationally, there is some chance she may enter civil service again, but still a slight chance she might re-enter the military. Does this affect our choice?

  • What about rolling them into an IRA? – mhoran_psprep Feb 19 '16 at 11:43
  • Possible, but we want to stay with the TSP to take advantage of the low fees. @mikeazo details in his answer. – Crunch Feb 20 '16 at 2:04
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Is there any advantage to keeping one vs. the other?

No, there is no advantage of one vs the other. They really are the same thing. Same fund choices, same fees, same rules.

Situationally, there is some chance she may enter civil service again, but still a slight chance she might re-enter the military. Does this affect our choice?

Not really. Since she has separated from both she can combine into either using TSP-65. If she reenters one of the services, she would be contributing to that fund. So if she converts everything into the military account then reenters civil service, she would have 2 accounts again. This may factor into the decision some, but when she separates again (or retires), it can all be converted again. So if she is more likely to enter civil service, I'd convert into that one so that there is only one account (easier to manage).

What about rolling them into an IRA?

This question came from the comments. It is a valid option. With other IRAs you will have more investment options. That said, the TSP funds are pretty competitive and have very low fees (0.029% in 2015). Compare this to something like a Vanguard target retirement date fund which is around 0.16%. Depending on when she plans to start pulling from the funds, that difference could work out to the tune of tens of thousands of dollars.

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