Retirement Planning/Compound Interest


Hello Mr.Brumbaugh

I have a TSP account from my last job which I am looking to rollover to my new employers 401k plan. My question is my TSP account has eight years of compound interest and I started my new job three months ago. When I roll it over will I have 8 years and three months of compound interest or will I start over from scratch?


Dear Sean,

You will have the benefit of the eight years' compounding only if your funds were in the interest-bearing account(s). That which is in the stock accumulating accounts do not earn interest. Such funds reflect the ups and downs of the consensus of the investors. This would also be true with the 401(k).

I suggest that you do not roll your TSP into your new employer's 401(k). Instead, do an institution-to-institution transfer of your TSP into a "pour-over" IRA. By doing so you gain control over the funds that you would not have in the 401(k).

For more information on this you may contact me at (888) 792-2379 or

Willard R. Brumbaugh, LUTCF
CA License 0374776

Retirement Planning

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Willard R. Brumbaugh, LUTCF


I have answered many questions regarding 401ks, IRAs and annuities as well as life insurance. I have been counselling against most Qualified Plans since 1994.


Ranked in the top 5 in retirement catagories at most of its last 2 1/2 years. Organizations I belong to: National Association of Insurance and Financial Advisors-California
Inland Empire Estate Planning Council

Life Underwriters Training Council Fellow

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