Three Things to Know When You Have Two TSP Accounts

Written by Cloud Spurlock, Federal Retirement Thrift Investment Board | December 19, 2019

Written by Cloud Spurlock, Federal Retirement Thrift Investment Board | December 19, 2019

If you’re considering a role in the federal workforce after you leave uniformed services, you’re in good company. About one out of every three current federal civilian employees is a veteran, according to the U.S. Office of Personnel Management. Veterans who choose to continue serving our country as federal civilian employees bring unique skills, leadership experience, and diverse perspectives that enhance every corner of government work.

Many veterans also bring a uniformed services Thrift Savings Plan (TSP) account with them when they transition to federal civilian service. With the Blended Retirement System firmly in place since 2018, the number of civilian employees with two TSP accounts will likely increase in future years.

So, what do you do with two TSP accounts? Here are three things you should know.

1. You don’t have to do anything with your uniformed services TSP account right now.

The great news is that you don’t have to do anything with your TSP account when you separate from uniformed services. This is true whether you transition to federal civilian service, choose another career, or fully retire. You can keep your savings in your uniformed services TSP account and continue to take advantage of the TSP’s low fees and smart investment options. Although you won’t be able to continue making contributions to your uniformed services account, you can transfer in money from IRAs and eligible employer plans.

Remember that long-term investing doesn’t need constant attention. This is especially true when you choose a Lifecycle (L) Fund based on when you’ll need your money. The L Fund you choose will continually adjust for you as you get closer to your target date.

Still, you should consider logging into My Account periodically to be aware of any account activity and to make sure that your investment choices are on track to achieve your financial goals. It’s also important that you keep your mailing address and other contact information up to date in your My Account profile settings.

2. Your TSP account number is the same for both your uniformed services TSP account and your civilian TSP account, but you manage the accounts separately.

When you join the federal civilian workforce in a position eligible to participate in the TSP, your civilian TSP account becomes established in the first pay period of your first contribution. Agencies automatically enroll members of the Federal Employees Retirement System (FERS), so they can receive their Agency Automatic (1%) Contributions and Agency Matching Contributions. If you already have a uniformed services TSP account, your account number will be the same for your civilian TSP account.

Although the account numbers are the same, the funds in your two TSP accounts remain separate. That means that you manage the accounts separately, and most rules and limitations apply individually to each account.

Managing your accounts separately becomes especially important when you consider taking money out. Loan and withdrawal rules apply to each account individually, and the rules are detailed and specific. For example, if you contribute to a Roth TSP, the Roth creation date may be different for each account, which can affect your eligibility to withdraw Roth funds tax-free. If you’re considering taking money out, be sure to read the TSP booklets carefully, and consider talking to a qualified financial advisor.

Keep in mind that if both your accounts are active, such as for civilian employees who also receive military pay and benefits as members of the Ready Reserve, the IRS elective deferral limit applies to the combined total of contributions to both accounts each year.

Finally, you can make your My Account profile settings on each account different or the same depending on how you want to manage your online access. If you choose to make the password the same for each account, you’ll be able to log into one account and then switch over to the other without having to log out and log back in. You’ll still need to add and validate your email address(es) or phone number separately on each account to use required security features such as two-step authentication.

3. You may be able to combine your accounts.

When you separate from either uniformed services or from federal civilian service, you may be able to combine your two TSP accounts into one. After you separate from the service associated with one of your TSP accounts, you can combine that account into the TSP account associated with your active service. That means that if you join the federal civilian workforce, you may be able to combine your uniformed services TSP account into your civilian TSP account.

Some TSP accounts can’t be combined. You can’t combine your accounts if both are related to active service. This is the case for a federal civilian employee who also receives military pay and benefits as a member of the Ready Reserve. And you can’t combine your accounts if your uniformed services account includes a traditional balance with tax-exempt contributions from combat zone pay.

Whether combining your accounts is beneficial will depend on your circumstances and financial goals. If you consider this option, keep in mind that once you’ve combined your TSP accounts, you can’t reverse that decision.

Find out more

When making financial decisions, it’s always a good idea to talk to a qualified financial advisor. If you’re active duty, you can consult a Personal Financial Manager or Counselor. You can also find information and publications about this topic on tsp.gov, including:


A final note
The TSP establishes a third type of account for the spouse beneficiary of a deceased TSP participant. Each beneficiary account has a unique TSP account number, even if the spouse beneficiary already has a uniformed services or civilian TSP account. Distinct rules apply to beneficiary TSP accounts, which you can learn about in the TSP booklet Your TSP Account: A Guide for Beneficiary Participants (pdf).

As original work produced by the U.S. government, the text of this article is not subject to copyright and exists in the public domain.

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