Quick Answer: Is Traditional TSP Or Roth TSP Better?

Is Roth TSP a good idea?

If you expect to have a higher income later in your career, or in retirement, then a Roth TSP is a great fit.

Even if you expect to be in the same tax bracket in retirement, the Roth TSP can be a good fit.

Regardless of what happens to future tax rates, you know that you won’t pay income taxes on your Roth earnings..

Does Roth TSP get matched?

“Keep in mind it is impossible to only invest in the Roth TSP because all matching contributions are made to the traditional TSP.

Should I switch to Roth TSP?

At retirement, withdrawals from the TSP will be taxed at the marginal rate, on top of pension and Social Security. For those who already contribute the maximum $17,000 a year to TSP, switching to the Roth TSP will effectively put more money into the TSP.

Should I contribute to both Roth and traditional TSP?

Your contribution allocation will apply equally to both your Traditional and Roth balances. … If you are covered under FERS, government matching contributions cannot go into your Roth TSP balance. Matching contributions are pre-tax and, as such, must go into your Traditional balance.

Can I max out my TSP and Roth IRA?

The 2019 contribution limits as outlined by the IRS state that you can contribute a maximum of $6,000 to a Roth IRA and a maximum of $19,000 to the TSP for a total of $25,000. … There are, however, annual income limitations on the eligibility for contributing to Roth IRAs.

Can I convert traditional TSP to Roth TSP?

A regular TSP cannot be converted to Roth TSP, nor can TSP be converted directly to a Roth IRA. However, even though it can’t be converted directly, TSP can be rolled over to an IRA and then converted to a Roth IRA.

Should I max my TSP?

The Thrift Savings Plan (TSP) is a great tool for federal employees to save for retirement. Saving, and even maxing out your contributions to TSP is normally thought of as a good thing. Yes, maxing out your TSP can be very beneficial, but may not be the best thing for your financial future.

How much should I put into TSP?

For those who choose to participate in the TSP, the elective deferral amount for 2018 is $18,500 with those 50 and over able to contribute an additional $6,000.

What does Dave Ramsey recommend for TSP?

We recommend that you put in a ratio of 80-10-10 or 60-20-20. That means put 80% in the C fund (common stock fund), the other 10% in the S fund (small-cap stocks) and 10% in the I fund (international).

When can I withdraw Roth TSP?

However, if you have a Roth TSP balance and withdraw any TSP funds before reaching the age of 59 ½, you will have to pay federal income tax on the earnings in the Roth account.

Can you claim Roth TSP on taxes?

With a Roth TSP retirement account, contributions are made after income taxes are taken out of pay. This means Roth TSP contributions are not tax deductible. But withdrawals of Roth TSP contributions and earnings at retirement will be tax free provided the account has been open for at least five years.