Q. Should I put some or all my TSP money into a Roth TSP? I’m almost 30, make around $59,000 a year and want to make aggressive choices so my money can grow. What should I do?
A. The answer depends entirely upon your predictions about your future income tax rates.
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If you wish to be aggressive, you should max out your contributions every year and select the highest numbered L fund – currently L2050.
If you believe you will retire in a higher tax bracket, then go Roth TSP. If you only contribute a small amount into your TSP account, chances are you will retire with a small-ish balance and thus a lower tax bracket at withdrawal.