Tax rate when transferring funds from TSP to a non-federal Roth


Q. I plan on retiring from 33 years of federal service with the Department of Defense. I have $1 million in my TSP and want to convert some of it each year to a Roth account. After retiring, I expect my taxable income to be about $100,000 per year. After retiring, if I transfer $50,000 per year from my TSP to a Roth account, what will my tax rate be? 

Note: I’m assuming the federal tax rate between $77,000 and $165,000 is 22 percent, for over $600,000 is 37%. Would I be taxed 22 percent on the $50,000, since $100,000 + $50,000 = $150,000 is between $77,000 and $165,000? Or would I be taxed at 37 percent because the total value of my TSP is $1 million?

A. The taxable portion of any TSP withdrawal will be taxed as ordinary income when your file your returns for the year. The only way to know what the tax you owe for the distribution will be is to prepare your tax return. I’m not sure what “retirement specialists” your referring to, but the right person to ask this question is the accountant who will prepare your tax return for the year in which you will receive the withdrawal.


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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

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