Q. What is the difference between a Roth TSP and a Traditional TSP? I was listening to a person yesterday and she says to place your funds in a Roth TSP so you don’t suffer the penalty at withdrawal. The only problem, she says, is you have to leave them in the Roth TSP for five years. Please clarify.
A. There are a number of differences in the rules governing the Roth and Traditional TSP options, and they are too complex to explain in this space. Everything you need to know before investing in the Roth TSP is here: https://www.tsp.gov/PDF/formspubs/tspbk08.pdf, https://www.tsp.gov/PDF/formspubs/tsp-536.pdf and https://www.tsp.gov/PDF/formspubs/tsp-775.pdf.
