TSP Interfund Transfers- A Surprisingly Useful Tool for Balancing Investments

By Sam •  Updated: 01/04/23 

Do you have money invested in the TSP?

Do you know how to move your investments between funds to use the power of the market to meet your retirement goals?

Or when I say “market, balance, funds, transfer” am I speaking a foreign language?

Not to worry – I’m here to help. In this article, I will

In addition, I’ll also touch on contribution allocations and how they relate to IFTs, and even how you can rebalance your TSP portfolio using these tools to make the most of your TSP contributions. It’s easy!

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Table of Contents

Please do not confuse my personal blog for financial advice, tax advice or an official position of the U.S. Government. This post may contain affiliate links. If you make a purchase after clicking on a link, I get a small percentage of the sale at no additional cost to you.

What is the TSP?

The TSP is the federal government’s version of a 401k plan for employees. They offer traditional (pre-tax) and Roth investing options; in 2023, participants can contribute up to $22,500. The government will match up to 5% of your contributions.

What is a TSP Interfund Transfer (IFT)?

Simply put, a TSP Interfund Transfer Request is a financial transaction that allows you to re-distribute all or part of your current account balance among any of the available funds.

For example, let’s say you’ve reached your first $10,000 invested – congratulations! You were a first time investor and you played it safe when you started – all that money went into the G fund.

But now you have reviewed your approach to investing and are willing to weather a little more risk. You’ve heard co-workers talking about stock funds like the C fund and S fund and you want in on that! An Interfund Transfer is the tool you need – IFT allows you to take all or a portion of that $10,000 and move it into another TSP fund (or multiple funds) that fits your investment goals.

IFT Rules

Let’s look at some of the rules that apply to TSP IFTs:

How to make an Interfund Transfer on the TSP website

Ready to make an interfund transfer? You can make the IFT requests online, or using the ThriftLine (1-877-968-3778). Let’s head to the TSP website and I’ll walk you through the process. Don’t worry – it’s easy!

Log-in and click on the “interfund transfers” link on the left side of the webpage. (The website will remind you if you’ve made any other IFT requests earlier in the month.)

Screenshot showing the interfund transfer button.
You can start an Interfund Transfer by clicking on the button on the left side of the screen.

Use the orange button at the bottom of the page: “Request Interfund Transfer”, and then enter the new percentage breakdown you want.

Instructions for Interfund transfers from the TSP website
The TSP website will walk you through the process for completing an interfund transfer.

For our previous example where you have $10,000 in available funds, you decide to leave $5,000 invested in the G Fund, and move $5,000 into the C fund; Converting to percentages, you want 50% of your invested funds to stay in G, and 50% moved into C. Enter those values on the right side of the table, make sure they add up to 100%, and hit “continue”. Follow any further prompts. That’s it! The system will notify you once the transaction has been processed.

Differences between an interfund transfer and a contribution allocation

The next obvious question is “Does this change my future contributions?” No – Interfund Transfers only impact the balance you already have invested in the TSP.

If you want future contributions applied into both the G fund and the C fund, for example, you need to change your “contribution allocation” – using form TSP-1– this is what tells the TSP how you want to invest any NEW money coming into your account.

How to rebalance your portfolio with an Interfund transfer

If you want to maintain a target asset allocation, you will eventually need to rebalance your funds. Why?

Let’s delve deeper into our previous example.

Say on January 1 you split your current investments evenly between the G fund and the C fund. They grow at different rates over time. In 2021 to date, the rate of return for the G fund is a stodgy 1.26%, while C has grown an exciting 23.16%.

In order to maintain an even split in each fund, you’ll need to use Interfund Transfer Requests to move some of the investment growth from the C fund into the G fund to restore the 50% balance you are targeting.

And that’s the basics of Interfund Transfers! A handy tool that allows you to move your investments between funds. Used in concert with Contribution allocations, they can help balance your portfolio.

Where to learn more

Want to learn more about the TSP? Check out my TSP School series.

Do you have questions or comments? Drop a note in my Facebook community.


Sam i.e. "Gov Worker" started working for the government at age 18 and loved it so much that he never left. He started GovernmentWorkerFI in 2019 to help fellow federal employees understand their benefits, take control of their finances, and live their best lives.

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