Investing in Gold through a TSP (Thrift Savings Plan)

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If you're a federal employee or military member with a Thrift Savings Plan (TSP), you might be wondering how to diversify your retirement savings with assets like physical gold or silver. In this article, we’ll explain how TSP accounts work, why they don’t allow direct precious metals investments, and how to gain exposure to gold through a rollover into a self-directed IRA.

The Basics First: What is a TSP Plan?

The United States government offers a unique type of defined contribution retirement plan to its employees and to members of the various branches of the armed services. Through the Federal Employees’ Retirement System Act of 1986 (FERS), Congress established the TSP as a 401(k)-style alternative to public workers. Technically speaking, the TSP forms one of the three parts of any FERS package, along with FERS annuities and Social Security.

Much like with a 401(k), employee participants in a TSP plan are able to defer money from their paychecks into a retirement investment account. There are even possibilities for match programs from the federal government. Once contributed, those assets are placed into the Thrift Savings Fund, which is managed by the Federal Retirement Thrift Investment Board. There are five executive members of this board, each of which is directly appointed by the President of the United States.

Employees or military members who contribute to a TSP account have very limited investment options, although they can mix and match between each option as they see fit. The Thrift Savings Fund is made up of ten investment funds, and the six most significant are called the G, F, C, S, I and L funds. These funds are created with mutual fund portfolios organized based on varying levels of risk. You cannot hold individual securities through the TSP.

Retirement savers who leave their federal post are eligible to either keep their money with the TSP (though they may not make any further contributions) or roll over their investments into another qualified employer plan or an IRA.

How to Rollover Your TSP to a Gold IRA

Once you've left federal service, you're eligible to roll over your TSP into an Individual Retirement Account (IRA)—including a self-directed IRA that allows you to purchase IRS-approved physical gold and silver.

Here’s how to get started:

• Step 1: Choose a reputable self-directed IRA custodian who specializes in precious metals.
• Step 2: Open a new self-directed IRA account.
• Step 3: Request a direct rollover from your TSP to your new IRA to avoid taxes and penalties.
• Step 4: Once the funds arrive, purchase eligible gold or silver (e.g., American Gold Eagles, Canadian Maple Leafs, gold bars .995+ purity).
• Step 5: Your precious metals must be stored at an IRS-approved depository like Brink’s or Delaware Depository—home storage is not allowed.

This strategy allows you to gain true exposure to physical gold within a retirement account while maintaining tax-deferred status.

TSP Plan Rollover Rules & Limitations

If you have a TSP, you can perform a full withdrawal from your account once you leave federal service. Possible rollover destinations include an Individual Retirement Account (IRA), a 401(k) plan, or other select qualified plans. Here is an overview of some TSP rollover rules:

• When you receive funds from your TSP for a rollover, which can take several weeks from the time you submit your request, you have 60 days to complete the process. If you fail to do this, the IRS will treat your money as a taxable distribution.
• You cannot use the cash from your distribution to purchase investments in the period in between receiving your TSP distribution and establishing your IRA.
• Tax rules from TSP rollovers can be complicated, and you should consult a tax advisor prior to attempting a rollover.

It is advised that you select the option to perform a “direct rollover” with your TSP funds. In a direct rollover, you never receive a check for your distribution; rather, your TSP plan provider will transfer the money directly into you new IRA plan.

TSP Plan vs. 401(k) vs 457(b) vs Other Retirement Accounts

Here is a table that illustrates how a TSP account compares to other similar retirement vehicles.

(In this case, “Maybe” denotes that availability varies on a case-by-case basis. While some TSPs offer gold exposure in the form of stocks and mutual funds, some do not.)

Can You Invest in Gold with a TSP Plan?

Unfortunately, the TSP does not allow direct investment in physical gold, silver, or any other tangible assets. It also does not offer mutual funds or ETFs that hold gold mining stocks. Your TSP contributions can only be allocated to the available TSP funds (G, F, C, S, I, and L Funds), all of which are limited to traditional stock and bond market exposure.

If you're seeking to hedge against inflation or diversify into alternative assets like precious metals, the only way to do so is by rolling over your TSP into a self-directed IRA after separating from federal service.

Differences Between Investing in Physical Gold vs. ‘Paper Gold’

Paper stocks refer to individual securities or equities that represent shares in precious metals mining or exploration companies. Holding these securities gives investors indirect exposure to the precious metals market. Some of the larger funds in the space include the Gold Miners Index (GDX) or the BUGS Index (HUI), which are both ETFs with diversified holdings in the sector.

Be warned, however, that these types of investments are convenient to buy and sell but pose a greater risk than physical bullion. Since they're listed on digital exchanges, they can be bought and sold instantaneously and therefore are more prone to erratic price swings than real assets. Unfortunately, that's not the only kind of unique risk they pose. Below, we've highlighted a few other risks of paper gold:

• Regulatory Risk – regulations surrounding the mining and exploration sector are fickle and are subject to change depending on political sentiments, which makes the industry highly unpredictable.
• Cost of Production Risk – it's expensive to mine gold or silver ore, and upgrades to equipment or fleet overhauls can cause a company to over-leverage and potentially go down the path toward bankruptcy.

• Management Risk – when a company is taken over, there's a lot of management risk involved since the new management team might not have practical industry experience and can therefore jeopardize the company due to negligence.
• Fiat Currency Risk – fiat currencies, which are used to buy and sell paper assets, are vulnerable to monetary risks such as inflation, hyperinflation, and devaluation.

On the other hands, there's no such risk profile for physical precious metals like gold or silver bars. Since they are physical possessions, there's no counterparty risk and throughout their millennia-long history the value of these assets has never hit zero.

Why Roll Over Your TSP into a Precious Metals IRA?

Rolling over your TSP into a self-directed IRA gives you much more control over your investments, including the option to buy physical gold and silver. Unlike a TSP or 401(k), a self-directed IRA allows you to hold IRS-approved metals that are stored securely in a regulated depository.

Here are a few advantages of a Gold IRA:

• Asset Diversification: Add real assets to your portfolio alongside traditional stocks and bonds.
• Inflation Hedge: Precious metals often retain value during times of inflation or economic downturn.
• Tax Advantages: If done via direct rollover, your funds remain tax-deferred just like in your TSP.
• Safe Custody: Metals are stored in fully insured, IRS-approved vaults with strict security.

Best of all, you’re no longer limited by the TSP’s narrow fund selection or reallocation restrictions.

Why Dedicate 5-20% of Your Retirement Portfolio to Precious Metals

Most financial experts recommend allocating 5–20% of your retirement savings to precious metals, depending on your risk tolerance and investment horizon. Gold and silver are effective tools for both wealth protection and long-term growth.

Precious metals provide stability when markets are volatile, and they often perform well during periods of inflation, currency weakness, or geopolitical uncertainty. For example, gold prices surpassed $3,400/oz in 2025, a sign of growing investor demand for tangible assets.

Silver, on the other hand, has strong industrial applications, particularly in clean energy sectors like solar and EVs, which may drive future demand and prices.

Precious metals are a double-edged sword, invaluable as both a protection tool and a growth catalyst. How much of your wealth you dedicate to precious metals will depend on your age and time horizon, but, generally, investors allocate between 5 and 20 percent of their retirement portfolio to gold or silver. Typically, older investors near their target retirement age spend more on precious metals than younger investors who can afford to take on more risk.