Thread: Let me know what you think

mattdog240 wrote:

I am currently commiting 14% to my TSP. I was thinking of bumping it down to 5%. My reasoning behind this is I also have a ROTH IRA. Wouldn't it be smarter for me to put the max into my ROTH IRAand just get that free 5 % in my TSP? I mean if my money is tax free when with drawen in the ROTH why not right??

Let me know what you think... I am new in the game

Welcome mattdog240
It depends on what you can anticipate for your retirement income - will it be higher or lower than your present income (as related to your tax bracket now vs. retirement)?
There are many other issues to take into consideration. Others probably can highlight them better than I can. You can also do a search on this forum for "IRAs" and find out what has already been said and explained.

Hi Mattdog, welcome.

We have "discussed" this before, here is the link:

http://www.tsptalk.com/mb/forum19/724.html

You are right, if you don't draw on it until your 59 and a half, a ROTH makes sense to me. Tax free then. Income then makes no difference. Sorry W_W, don't mean to go against what you said.........actually, yes I do......:P

Just remember though, there are limits as to how much you can put into a ROTH each year, and it's up to you to keep track of it. You can however have more than one ROTH.

Hope this helps,

Good luck

mlk_man wrote:

Hi Mattdog, welcome.

We have "discussed" this before, here is the link:

http://www.tsptalk.com/mb/forum19/724.html

You are right, if you don't draw on it until your 59 and a half, a ROTH makes sense to me. Tax free then. Income then makes no difference. Sorry W_W, don't mean to go against what you said.........actually, yes I do......:P

Just remember though, there are limits as to how much you can put into a ROTH each year, and it's up to you to keep track of it. You can however have more than one ROTH.

Hope this helps,

Good luck

Oops, you already mentioned the max, your on the right track. As far as I'm concerned anyway. :^

M_M

mlk_man wrote:

Sorry W_W, don't mean to go against what you said.........actually, yes I do......:P

Why are you giving me the tongue?

Thanks guys and girls! :^

Wonder Woman wrote:

mlk_man wrote:

Sorry W_W, don't mean to go against what you said.........actually, yes I do......:P

Why are you giving me the tongue?

Oops, sorry, not our 2nd date yet.............:u

Hehehe... thinking back to one of Tom's posts... "two members for the price of one..."

mattdog240 wrote:

I am currently commiting 14% to my TSP. I was thinking of bumping it down to 5%. My reasoning behind this is I also have a ROTH IRA. Wouldn't it be smarter for me to put the max into my ROTH IRAand just get that free 5 % in my TSP? I mean if my money is tax free when with drawen in the ROTH why not right??

Let me know what you think... I am new in the game

Another thing matt, I believe you'll have to pay taxes on any "pre-tax contributions" you made to your TSP if you transfer to a Roth. You will also first have to transfer into a regular IRA and then transfer that into a Roth. All money contributed to a Roth has to be "post-tax". It still works out for the best in the long run.......

If you don't have a lot in your TSP right now, it's no biggie. But if you do, could be a lot of taxes to pay up front...........check with a broker to be sure about this. I'm going through this now with a friend of mine's retirement funds. She only has $5000 total in three different retirement funds so it's not a biggie. I'm not sure how we will know how much tax she has to pay though. I'm thinking when her money gets transfered from her retirement funds, one 403B, one IRA, and one insurance annuity, they will let Scottrade know how much she has contributed pre-tax. Then when we transfer it into a Roth, they will tell us how much.

Also, there is no time frame for transferring into a Roth once you have your regular IRA set up. Once the money is there, you can transfer at anytime.

Good luck,

M_M

mattdog240

I contributed money to TSP. And it was shear dumb luck that it wasen't all wasted in the stock market wars and ignorant allocations. There are over 3 million participants in TSP.
Stay tuned, educate yourself, know how the system works, otherwise we will all be needing the Chaplain! Cause I put the TSP system and empty boots on the same page.

The Roth is much wisdom. However, the TSP doesn't charge to move money around (yet). Also, it is often better to work your tax money now, and likely pay a lower tax rate upon retirement. Plus, you can borrow against it if you absolutely must. Once you give it up to the tax man, is hard to get it back. $$$ :-) Probably a matterto discuss with a professional as part of your overall retirement strategy. :u

Mattdog240

TSP has employer matching grants up to what is it 5%. That is hard to beat and not something that an IRA has. I am sure you can find a financial professional somewhere, maybe yes, maybe no. I heard that the rich and famous have their money mannaged by professionals, but can you afford that?

Why don't you become the professional? It's your soul, it's your money, and it's gonna be your retirement some day.