Thread: Roth Tsp

After what they did with our regular TSP accounts, I wouldn't buy in to a Roth TSP option if they offered it. Get a Roth IRA if you want a Roth option. At least then you'll have more control over your funds.

IMO if you are FERS - TSP 5% matching, max out your Roth, and open a brokerage account. If you want to put more in TSP after that, go for it. Me, I want more control over MY money.

While a TSP Roth makes sense, when was the last time TSP mgt adopted any member suggestion? I retired a yr ago age 63, but had never considered the need or benefit of a Roth IRA. I opened a Roth earlier this yr. I am considering transferring the TSP into the Roth. I would appreciate others input on this.

If OPM had sent me 1 or 2 notices between age 57 and 59 explaining why opening a Roth could be beneficial, hopefully, I might have done so. If federal employees aged 55 - 65 were surveyed to determine how much they knew about Roth's, it might surprise or shock not only most fed. employees administering fed employee retirements but Congress.

Originally Posted by The Fugitive

Here's another Wash. Post on a ROTH for the the TSP.

http://www.washingtonpost.com/wp-dyn...902536_pf.html

The best quote was this"....
TSP officials have not ruled out adding a Roth option, but they said they need time to determine whether such a feature would have broad appeal and how much it would cost to set up. "Our position on Roth is that we need to do some homework," Gregory T. Long, chief executive of the TSP, said yesterday."

Need time to determine broad appeal? Maybe time for the leader and board to get the ok from barclays. Maybe they need to get their nose's exposed to the sun and some fresh air and not so invested in what barclays want's them to do. If barclay's can't make any money on it then it'll get the thumbs down from the Keystone Kops.....er tsp board.

We've been asking for this for quite awhile. What a joke these guys are.

The Fugitive

Barclay's is considering buying out one of two banks. Maybe they'll give the OK for our Roth once they finish spending our money.

I already max out my ROTH, but Since I am in the 15% Bracket (because of multible kids) it makes no sence to invest more the minimum in the TSP(5% for the match). I would max out the TSP if I could after tax(then I could withdraw it after tax at retirement). I know I am not alone. I talked to several friends and 3 of 4 people have the Roth Option in their 401(K), why is the TSP so slow in pursuing this with Congress. Congress would approve this if the TSP Board reconmended it. Lets get the computer programs updated and add the ROTH. Its a no brainer that it would increase participation.

I'm skeptical on a TSP Roth because if I'm going to get a Roth, I'd want to diversify out of the GFCSI Funds.

Originally Posted by nnuut

June 2nd, 2008
Lawmakers propose ‘Roth’ options for TSP
By STEPHEN LOSEY
May 27, 2008
......The draft bill, released publicly May 16, also would automatically enroll all new federal employees — military and civilian — in TSP. The Pentagon is expected soon to decide if it backs automatic enrollment for new military recruits.
The bill would require that employees who are automatically enrolled contribute a percentage of their salary determined by the board that governs the TSP. That rate would be between 2 percent and 5 percent; the bill suggests 3 percent.........

Ok, automatically enrolled seems like an employee is FORCED to save for retirement. No Choice? YOU WILL SAVE MONEY REGARDLESS OF FINANCIAL SITUATION.

And then the board that governs TSP decides the amount? Suggests 3 percent? Yea right. They'll go for the 5 to boost assets.

Am I reading this right? Seems kinda kookie to force people to save. What's next??? You are taking leave on Monday because you have 188 hours on the books and its August 10th and we aren't going to waste time trying to wait for you to plan your life?

Somebody point out the sanity in this article?

I believe a waiver is offered should new hires prefer to wait based on their
financial circumstances. The idea of getting in early is still the best way
to ensure a fruitful retirement. But not by being forced or by misleading
newbies into believing they have no choice. Exposure and education are
the keys.

The worst part of this is the FORCED % CONTRIBUTION and the DEFAULT L FUND.

1. Nobody should be misled into thinking they have no choice in enrollment.

2. Nobody should be automatically enrolled in RISK.

3. Nobody should be automatically enrolled for more than 1%.

IMO if they want to force automatic enrollment, then default fund should remain the G fund and the amount should be 1%. Who are they to judge what someone can afford? We all know TSP and HR offices fail abysmally at educating new hires about their retirement. This won't be any different. There are 2 opt-out options 1) opt out of TSP entirely 2) opt out of L fund into another fund. But the way the bill reads if you don't opt out, you will be forced to contribute whatever % TSP Board decides is the default amount. Sort of like SS....

Looks like they are creating a whole new set of rules for new hires, just like when they created FERS. You WILL contribute what we decide, where we decide. You can opt out altogether or contribute to a different fund, but you WILL contribute WHAT we decide, not any less.

Even more silly for military, I assume they picked 3% because of the matching since the 4th and 5th percentile are at 50% matching because the first 1 percent is just for participating.

Also, how are they going to determine your expected retirement date? Age 56 (minimum)? Social Security Retirement date (67 for me)? I had no idea what my retirement date would be when I joined Federal Service, so what's going to be the default?

Originally Posted by Silverbird

Even more silly for military, I assume they picked 3% because of the matching since the 4th and 5th percentile are at 50% matching because the first 1 percent is just for participating.

Also, how are they going to determine your expected retirement date? Age 56 (minimum)? Social Security Retirement date (67 for me)? I had no idea what my retirement date would be when I joined Federal Service, so what's going to be the default?

Ok retirees, answer me this, my wife became disabled and receives SS, of which 85% ($.85 tax for every $1.00), is taxed because I make over 44,000/yr. Now, with that in mind, can you verify that this is also the same for retirement. That is, I retire and my "income" from TSP, retirements and other 401k's should and will be over 44,000/yr that my SS is also taxed at 85%??????