Q. I have a traditional TSP account, and I am considering utilizing the Roth TSP option. Does the money in a traditional TSP account and the money in the Roth TSP account compound and grow together as one account? Or does each compound separately? I have a substantial amount in my traditional TSP, and I do not want to lose the maximum growth from future contributions and compounding on that amount if I start utilizing the Roth TSP option. Example: A traditional TSP compounding at $200,000 is much larger than a new Roth TSP compounding at $2,000.
A. Your comments about differences in compounding rates don’t make sense. What I think you are really trying to figure out is whether or not you may direct the investment of the Traditional and Roth balances independently. You may not. Both account balances will be invested identically and will grow, or shrink, at the same rate.
