TSP to Roth IRA Conversion Question

[drildrill23]

I am planning on ROLLING over halve of my TSP into my Charles Schwab Roth IRA account this year 2025, but I am afraid that doing so will affect my returns next year. With that said and out of the way, can I ROLLOVER my TSP into my Roth IRA account without been penalized? 

[Bsch4477]

If you roll over funds from a traditional TSP to a Roth IRA there’s no penalty but you will have to pay tax on the amount at your marginal tax rate. 

[NCperson · Accepted solution]

@drildrill23 by "penalize" do you mean subject to income tax or subject to the 10% penalty? 

1) There is never a 10% penalty at the time of conversion (too detailed, but under certain circumstances, there could be a 10% penalty upon distribution)

2) There is income tax on the conversion from a Trad TSP.