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A little late on the reply, but might be useful for others.

Understanding the TSP:

Once you retire, you can roll over your TSP just like you could any other fund, with a transfer directly from the TSP to the mutual fund or broker of your choice... you can even roll it into a stock account with Scottrade, Ameritrade, etc... I did this with some Roth IRA's to allow me to trade stocks directly in the accounts instead of trying to pick good mutual funds... which I view as de-worse-ification. They'll liquidate all your shares and transfer the proceeds over as cash. After it's transfered, you can buy whatever shares or stocks you like.

You can take a loan out against your TSP while you're still in the service (of course not recommended). The penalty is you have to pay the G fund rate back to yourself (this amount is not tax deductible). Good news is there isn't really a penalty... the downside is you won't make any money on it since it will be spent... and you have to pay it back prior to sepearting, so if you seperate suddenly, you'll either have to pony up, or take the tax penalty +10%.

You can take the money out directly, and roll it over, but the tax paperwork you have to do makes this a ridiculous way to do it.

Also, once you give them your money, if you determine that you'd like to move some of it to a Roth IRA, they won't let you. I deployed to a tax-free zone which made my taxable income much lower, and as such, I thought it would be smart to roll some of it over (since I was assured of being in the lower tax bracket) into a Roth... didn't really have the extra loot to add $4K to the Roth before the cutoff... No such luck.

Fool On!

TSP constists of 5 funds:
G fund tracks Treasury Bills
F fund tracks LBA Bond Index
C fund tracks S&P Index
S fund tracks Wilshire 4500 Index
I fund tracks EAFE Index

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