Results 1 to 6 of 6

Thread: Roth TSP vs TSP

  1. Question Roth TSP vs TSP

    I am 58 and I WANT to retire (more like praying) at 62. I have a TSP account and have recently heard that I should move my TSP to a Roth TSP but that should be done 5 yrs prior to retiring (I am 1 yr short). My question is: is a Roth TSP account better then regular TSP account, should I change and since I am short 1 yr can I? I also have an outstanding loan from my TSP account and would that affect the move to Roth? Thank you.


  2.  
  3. #2

    Join Date
    Feb 2007
    Location
    San Diego, CA
    Posts
    6,952

    Default Re: Roth TSP vs TSP

    Quote Originally Posted by obr943 View Post
    I am 58 and I WANT to retire (more like praying) at 62. I have a TSP account and have recently heard that I should move my TSP to a Roth TSP but that should be done 5 yrs prior to retiring (I am 1 yr short). My question is: is a Roth TSP account better then regular TSP account, should I change and since I am short 1 yr can I? I also have an outstanding loan from my TSP account and would that affect the move to Roth? Thank you.
    It's been presented many times before, but your tax footprint should determine your course of action. If you have no need to save on your taxes for the next few years and want to have tax-free returns on your current investments when you retire, then yes, go for it. But if you are just trying to go with the crowd, make sure it is the right decision. You should be on a first name basis with a tax person by now. They can show the differences in your approach, fairly easy.
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

  4.  
  5. #3

    Default Re: Roth TSP vs TSP

    The 5 year thing is just like an IRA where you have to have it for 5 years before you can withdraw from it or you pay a penalty. That's why they say you have to open it at least 5 years before retirement. The other thing to be aware of if you are going to leave your money in the TSP and withdraw it from there in retirement is you have no control of the amounts withdrawn from the traditional TSP vs. Roth TSP. It will be withdrawn from both in proportion to their relative amounts. That's why you can't leave a Roth TSP untouched the first year while you only withdraw from the traditional TSP.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2022
    Past Returns:
    2019 27.97%, 2018 -3.36%, 2017 13.10%, 2016 -1.79%, 2015 8.71%,5Yr Avg 8.35%

  6.  
  7. #4

    Join Date
    Oct 2010
    Location
    Aiea, Hawaii
    Posts
    1,107

    Default Re: Roth TSP vs TSP

    Quote Originally Posted by Frixxxx View Post
    It's been presented many times before, but your tax footprint should determine your course of action....
    What Frixxxx said. Search "Roth vs Traditional IRA' on the boards.
    Also there is a tsp.gov link to 'Is a Roth TSP right for you?' on the TSPTalk Home page.

    If you see my previous posts, I and many others, are not big fans of Roth TSP. My recommendation, and also what I have done personally, is open a Roth IRA on the outside. Leave TSP as traditional. This gives you more options in retirement to do 'tax diversification'.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

  8.  
  9. #5

    Join Date
    Oct 2010
    Location
    Aiea, Hawaii
    Posts
    1,107

    Default Re: Roth TSP vs TSP

    Tax Consequences of TSP Withdrawals: Traditional and Roth

    Here is a good review of FERS TSP WITHDRAWAL options and tax implications. For those of you looking at retirement and have at least some Roth TSP.

    By the way, if you haven't looked at this site (myfederalretirement.com) before, it has LOTS of good info.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

  10.  
  11. #6

    Default Re: Roth TSP vs TSP

    Hi USC,

    I read a TSP publication before (which I can't find now) that if you have both taditional and Roth Tsp, you can rollover your Roth Tsp to a Roth IRA in order to avoid 10% penalty.

    In my case, I am not 59.5 yrs. old yet and I have mix TSP. If I opt to have my monthly distribution, I will be penalized for the Roth portion dustribution. I am trying to find a way to avoid the penalty.

    Quote Originally Posted by uscfanhawaii View Post
    Tax Consequences of TSP Withdrawals: Traditional and Roth

    Here is a good review of FERS TSP WITHDRAWAL options and tax implications. For those of you looking at retirement and have at least some Roth TSP.

    By the way, if you haven't looked at this site (myfederalretirement.com) before, it has LOTS of good info.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

  12.  

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
SPY (C Fund) (delayed)
Roth TSP vs TSP
(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)
Roth TSP vs TSP
(Stockcharts.com Real-time)
EFA (I Fund) (delayed)
Roth TSP vs TSP
(Stockcharts.com Real-time)
BND (F Fund) (delayed)
Roth TSP vs TSP
(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes