Keep the TSP or Roll It to an IRA: What the Difference Costs

Updated August 2, 2026. Quick answer: the TSP is one of the cheapest investment vehicles that exists. Its C Fund cost 0.035% in 2025 — about $350 a year on a million dollars. The median advisory relationship we measured charges 87.5 to 100.0 basis points at that balance, or $8,750 to $10,000 a year, on top of whatever the funds cost. Rolling out is not wrong. It just has to be worth that.

What the gap is worth over a working retirement

On a $1,000,000 balance at 6% for 20 years, a 100 basis-point fee costs $580,107 of ending value. That is the honest headline, and it is also not the whole story — see below.

What the TSP actually costs

These are the TSP’s own published total expense ratios for 2025:

The TSP describes it in per-dollar terms: “A participant with $1,000 invested in the C Fund paid 35 cents toward the fund’s expenses; a participant with $100,000 invested paid $35.” There is no fee to withdraw, no fee for installments, and no commission on the TSP annuity.

What advice costs, measured rather than asserted

We read the fee schedules of 176 registered investment advisers from their own Form ADV Part 2A filings, weighted to a screened frame of 9,234 firms. At a $1,000,000 relationship the median came out at 87.5 to 100.0 basis points depending on which end of a firm’s published schedule applies. The dataset is published in full: 10.5281/zenodo.21741167, and the report that came out of it covers the rest, including how many firms will not price a retail relationship at all.

What could honestly justify it

A fee is not a verdict. Some of what an adviser does has a measurable dollar value that can exceed the fee, and a federal career is unusually full of it:

• Withdrawal sequencing across three sources — annuity, TSP and Social Security interact through the tax brackets and later through IRMAA. Getting the order right is worth real money: the order itself, and what it does to Medicare premiums.
• Roth conversions in the window between retiring and RMDs starting, which is a once-only opportunity with a closing date.
• Not selling in a bad year. Unglamorous and genuinely hard to do alone.
• Survivor and beneficiary work that only matters once, and matters enormously then.

What does not justify it is fund selection. The TSP’s index funds are already at the cheap end of what money can buy; no one is going to beat them on cost, and a portfolio rebuilt out of similar index funds inside an IRA starts the relationship several thousand dollars a year behind.

The three things that decide it, none of which is the fee

1. Age at separation. If you separated in or after the year you turned 55 and might need the money before 59½, an IRA rollover takes that access away — the penalty exception does not survive the move. That is a hard constraint, not a preference.

2. What you actually want to hold. The TSP has five core funds and the L series. If your plan needs something that is not in there, that is a real reason. If it does not, moving buys you nothing you did not have.

3. Whether you want a person. Some people manage this alone and sleep fine. Others do not, and paying for help they will actually use is a better outcome than saving the fee and getting the sequencing wrong. Both answers are defensible; only the unexamined one is not.

A middle path exists and is usually overlooked: keep the TSP and pay for advice by the hour or by the plan rather than as a percentage of the balance. Where flat fees beat a percentage puts the crossover point in dollars.

TSP expense ratios (2025, published at tsp.gov Expenses and fees) and the no-commission statement from tsp.gov; the advisory fee medians from our own reading of 176 Form ADV Part 2A filings, published as 10.5281/zenodo.21741167; the IRA penalty carve-out from 26 U.S.C. § 72(t)(3)(A). Read August 2026. The calculator is deterministic arithmetic on your inputs, not a projection, and this page is general information rather than advice.