Traditional vs. Roth TSP


Q. I’m a 28-year-old FERS employee contributing 10 percent of my salary plus my agency’s 5 percent match to a traditional Thrift Savings Plan. I’m planning to increase my contribution by 1 percent each time I approach a step increase or other pay increase until I eventually max out my contributions. My decision now is to determine whether to put these additional contributions into a traditional or a Roth TSP. My understanding of the trade-off analysis is that it essentially comes down to an assessment of my current effective tax rate compared with what I project my effective tax rate will be in retirement. I realize that projection is not an easy thing, since there are numerous uncertain factors. However, is that the crux of the decision, or is there more to it (i.e., if I project my current effective tax rate to be higher than my effective tax rate in retirement, is there any other compelling reason to contribute to a Roth TSP instead of a traditional TSP)?

A. That’s the crux of the decision.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

1 Comment

  1. USPS Letter Carrier on

    Instead of worrying about traditional TSP vs Roth TSP, consider contributing more than 10% of income. Try to max out your contribution sooner than later and don’t wait for step increases. If you’re still stuck on traditional TSP vs Roth TSP, consider instead going traditional TSP and max out a Roth IRA.

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