Thread: Roth/TSP question

sheasljj wrote:

azanon wrote:

If you can hit that max figure for your TSP, you've got a nice job. By my guesstimation, it'd take at least a stepped out GS-13 or better to pull that off.

This year I will be contributing just under $9000 to my TSP. But that is only because of the current limits. Next year there will be no limit on the amount of base pay that can be contributed to the TSP each month. So someone in my position and deployed for the entire year of 2006 could contribute in excess of $49,000 to the TSP if they are able to pay their remaining bills off of their BAH and BAS.

So I repose the question, what limits are there and what do they apply to?

Becuase I will be opening a Roth IRA shortly and would like to know what my limits are. If anyone could provide a good source for reading up on this, I would appreciate it.

IRS limits apply:

2005: TSP $14,000 + $4000 Catch-up if over 50, Roth $4000 ($4500 if over 50)

2006: TSP $15,000 +$5000 Catch-up if over 50, Roth $4000 ($5000 if over 50)

Detailed info on www.tsp.gov and the IRS website www.irs.gov

The original question was about the new Roth 401(k), not the current Roth; they are not synonymous.

IRA limitations are independent of everything else ($4K, 20% for SEP).

TSP-imposed limitation (10%) goes away next year; however, the IRS limitation still stands ($15K next year).

I don't know anything about the Roth 401(k), good question.

I might try 20% witholding.

Mike wrote:

I might try 20% witholding.

hehe...That's only on self-employed income. It's actually 25%, but since it works like a traditional IRA, you have to deduct your contribution before you count your income.

i.e.

$100 gross, contribute $25, net income = 100-25=$75, $25/$75=33%, too much.

$100 gross - $20 contribution = $80 net income; $20/$80 = 25%, but $20/$100 (the real income) = 20%.

Stupid IRS! :P

With the percentage cap gone next year, I can get away with it. :P

I'll still be well under the raw dollar amount ceiling that the IRS imposes. I don't have to worry about that nasty AMT... yet. If I ever get some type of dwelling that involves a mortgage payment and an associated deduction for interest / property taxes, I might be on the hook if I keep up this ridiculous savings rate. :shock:

hi az,
ROTH 401(k)s started 1 Jan. 2006
Please spread the word, ROTH TSP !!!
call your congressmen & follow up w/ e-mail
this would be a great addition to TSP-anyone reading this make that call
taxes are at there lowest levels in history, that won't last. everyone can use a tax-free account in case they need to make a large withdrawl without changing their tax bracket.
make that call--Thanks

Originally Posted by ROTH_TSP

hi az,
ROTH 401(k)s started 1 Jan. 2006
Please spread the word, ROTH TSP !!!
call your congressmen & follow up w/ e-mail
this would be a great addition to TSP-anyone reading this make that call
taxes are at there lowest levels in history, that won't last. everyone can use a tax-free account in case they need to make a large withdrawl without changing their tax bracket.
make that call--Thanks

Don't need another Gov't program to do this... just take any contributions over your match and allocate them to the ROTH of your choice. Easy and available.

Originally Posted by SkyPilot

Don't need another Gov't program to do this... just take any contributions over your match and allocate them to the ROTH of your choice. Easy and available.