Browsing: Roth TSP

Q. I’m a little unclear on the Roth IRA vs. Roth TSP differences. I’ve been told that I can’t contribute to a Roth IRA since my adjusted gross income (married, filing jointly) is too high. Does that same rule apply to the Roth TSP? It seems to me, if I can go with the Roth TSP and max it out at the 2014 maximum of $17,500, I can also max out the Veterans Affairs Department contribution (which goes to my traditional TSP). A. The Roth IRA contribution limits do not apply to Roth TSP contributions. Separate and distinct rules apply…

Q. I have been using a Vanguard Roth IRA Target Fund for my retirement account. Now that I work for the federal government, I have a Thrift Savings Plan standard account and contribute the additional 5 percent to take full advantage of employee matching. I’m 37 and plan on working until at least 67. I believe my best bet is to just keep maxing out my Vanguard Roth IRA, taking full advantage of my employee matching and putting away anything extra I can into my Vanguard Roth IRA. Do you think that is my best bet, or should I stop…

Q. If I am contributing to a traditional Thrift Savings Plan, can I now change my future contributions to a Roth TSP, or do I have to wait until open season? A. You may start, stop or change your TSP contributions at any time.

Q. I understand there is a way to roll over a Thrift Savings Plan account to a Roth IRA so the funds transferred are not taxed. Can you point me to guidelines on how to do that?  I am preparing to retire as a CSRS annuitant. A. This is only possible with a Roth TSP balance.

Q. Could you please explain the difference between the traditional Thrift Savings Plan and Roth TSP? I was told that the traditional TSP is taxed when you begin withdrawing it at retirement. And that only the government’s contribution to your retirement (let’s say they matched my 5 percent) is the only portion that is taxable when withdrawn; my contribution is not taxed at withdrawal. Is this correct? A. Basically, you fund the Traditional TSP with pretax deferrals from your paycheck and pay tax on money as it is distributed to you later. You fund the Roth TSP with post-tax deferrals…

Q. A recent question read in part: “I have more than four years until military retirement (April 2018). At that time, will I be able to transfer all Roth TSP contributions to my Roth IRA? I have no plans of transferring the traditional TSP balance. The goal is to combine Roth TSP/Roth IRA contributions and pay cash for retirement home.”  I agree that if you take a monthly withdrawal from the Thrift Savings Plan, they take from both traditional and Roth accounts. But I thought the TSP 90 form allowed transfer of Roth TSP contributions to a Roth IRA fund or…

Q. How is the federal matching amount handled for the Roth TSP option? Under the traditional TSP, that amount is added to the deferred compensation and taxed when distributed. Is the matching put into the Roth? When is it taxed? A. Matching is based on amounts you contribute to either the traditional or Roth TSP accounts, but agency contributions are directed entirely to your traditional TSP account.

Q. For the past five years, I’ve been contributing the maximum to the traditional Thrift Savings Plan (balance north of $127,000). In 2014, I plan to switch all contributions ($17,500) to Roth TSP. I have more than four years until military retirement (April 2018). At that time, will I be able to transfer all Roth TSP contributions to my Roth IRA? I have no plans of transferring the traditional TSP balance. The goal is to combine Roth TSP/Roth IRA contributions and pay cash for retirement home. We don’t want any debt, including mortgage upon retirement. A. You may not selectively…

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