By Mike Miles
April 3rd, 2013 | Uncategorized
Q. I have been contributing to my traditional Thrift Savings Plan for the past 3½ years and have accumulated about $7,000. With the introduction of Roth TSP, I was wondering if I should stop contributing to my traditional TSP and start a Roth TSP. I plan on being in a higher tax bracket when I retire, and I also have a Roth IRA.
A. If you’re confident that your tax rate will be higher on the contributions later than it is now, you should contribute the Roth TSP first.
USPS Letter Carrier Says:
April 27th, 2013 at 11:48 pm
$7,000 over 3.5 years is only $2000 contribution per year. It seems unlikely that anyone would retire at a higher tax bracket contributing such a low amount of money.
The question of Roth TSP vs traditional TSP is a distant second question to contributing as much money as your income and budget allows. Investing only $2,000 a year is not going to cut it.