Ask Terry Questions Government Thrift Savings Plan

Government Thrift Savings Plan

By Terry Savage on December 20, 2014 | Investments

Can a Government Thrift Savings Plan be transferred to a Money Market account? If so, are there tax ramifications?

Terry Says:  If you are just trying to get the “safest” option to invest your money within the Government’s Thrift Savings Plan, you could transfer into the “G” plan —  which is the equivalent of a money market fund.  BUT, if you are trying to get money OUT of your TSP account, it will be subject to taxes and penalties if you are under age 59-1/2 — before you can withdraw an invest in a bank money market account.  You don’t want to do that!  If you’re worried about stock market volatility and want to keep your money growing tax-deferred, just switch some money to the “G” option instead of your current investment choices within the plan.



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