Should I switch to Roth 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 do Roth TSP or traditional?

For most, the Roth TSP is the better choice because currently, you’re in a lower tax bracket than you’ll be in the future. With a Roth, your earnings and withdraws are tax-free because you contribute after-tax money, meaning you pay taxes upfront.

What is a good percentage to contribute to TSP?

5%

Can I convert my TSP to a Roth IRA?

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.

Is TSP better than Roth IRA?

The TSP is better if your taxes are high today and you expect them to be much lower in retirement. It is better to use your deduction against the higher tax rate. The Roth IRA is better the further away you are from retirement.

What does Dave Ramsey recommend for TSP?

As one example, Dave Ramsey has stuck by his rule for TSP recommendations for literally years: Invest 15% of your income every year, and make sure at least 5% of that (for those enrolled in the Blended Retirement System) is in TSP.

Should I keep my money in TSP after retirement?

Leave it in the TSP and let it grow Depending on when you begin retirement, you can simply leave the money in the TSP let it continue to grow. If you do not need to access it yet, it might be wise to let it be. Similar to other retirement accounts, you will need to begin minimum withdrawals at age 72.

What does TSP stand for?

Thrift Savings Plan

What is a good tsp PIP?

13.5% is a good return by any standard. However, had you gone individual funds (C/S/I), you could be sitting at a 12 month PIP of 22% or more.