Rolling IRA into TSP - what am I not understanding??

[Anonymous]

I have done my homework and am still confused, can the anonymous internet help? I understand these to be facts: 1) TSP has an annual contribution limit of 18,000. 2) In addition, anyone can contribute to a traditional IRA up to 5,500 (and/or a Roth IRA depending upon income limits but that's not relevant for my question). 3) One can transfer employer-sponsored plans or traditional IRAs into the TSP (but cannot transfer Roth IRAs). Then my question is 4) does anything prevent someone from contributing 5,500 to a traditional IRA and then adding it to the TSP, effectively meaning one is contributing 23,500 per year to the TSP which seems to contradict (1)?

Or, if anyone can opine on my specific situtation, it is 5) I previously (perhaps stupidly) converted an old employer 401k to a traditional IRA, and also added 5,500 to that traditional IRA in post-tax money during periods where I was not eligible for either 401k or TSP. Can I convert that all to the TSP? The TSP help line says yes along with everything I read, it just seems weird given it would also allow scenario (4). In case the set-up did not make painfully obvious, of course I am a lawyer with much more familiarity with hypotheticals than finance, so thanks in advance

[Anonymous]

Yes you can transfer an IRA into the TSP. Scenario (4) is fine and is not problematic.

[Anonymous]

PP again, and to answer your other question, it does not "violate" #1, because it is a TRANSFER, not a CONTRIBUTION.

[Anonymous]

1) yes
2) yes, but type of contribution and deductibility limited by modified agi
3) yes, you can transfer other plan assets into tsp
4) the threshold for deductible IRAs is very low. Transferring post tax (nondeductible) traditional IRA balances to a traditional tsp plan is not a great idea, as you are missing the benefits. Better off moving the post tax/nondeductible amounts to a Roth
5) in this situation I would transfer everything from the IRA to the tsp EXCEPT the post tax contribution to the traditional IRA. After the tsp transfer is complete, convert the post tax contribution amount to a Roth IRA.