So speaking on the Roth TSP

[Winner]

You make 147k?

yeah... gs-14/04 1811, with 25% leap... COLA is 22% ish...

Will be getting my step in Jan... 14/05... around 152k

High three should be somewhere around 160ish I suppose by the time 8 years rolls around.

Based on your info then your high 3 with step increase (without QSI) will be more than $160K for the next 8 years with two years as 14/07 and one year as 14/08:
Your current salary is $148K (based on 22% locality pay area)
14/05 is JAN 2018
14/06 is JAN 2020
14/07 is JAN 2022 current $161,462 increase by 1% is $173.1K and 2% is $185.4K
14/08 is JAN 2025 current $165K increase by 1% is $176.9K and 2% is $189.5K

So your average is $186.7K with 1.7% for every year of service or 34% for 20 years = more than $59k (average 1% increase) $63K (average 2% increase) + your supplement + your TSP. My estimate you will receive at least $80K without TSP and see if you need to withdrawal your TSP after you retire, if not then you may consider ROTH as evilanne mentioned transferred your ROTH outside to ROTH IRA as it doesn't have RMD.

I recommend all my friends to put in ROTH if they are not going to use their TSP more than 10 years.

[mmmmmbeer]

You make 147k?

yeah... gs-14/04 1811, with 25% leap... COLA is 22% ish...

Will be getting my step in Jan... 14/05... around 152k

High three should be somewhere around 160ish I suppose by the time 8 years rolls around.

Based on your info then your high 3 with step increase (without QSI) will be more than $160K for the next 8 years with two years as 14/07 and one year as 14/08:
Your current salary is $148K (based on 22% locality pay area)
14/05 is JAN 2018
14/06 is JAN 2020
14/07 is JAN 2022 current $161,462 increase by 1% is $173.1K and 2% is $185.4K
14/08 is JAN 2025 current $165K increase by 1% is $176.9K and 2% is $189.5K

So your average is $186.7K with 1.7% for every year of service or 34% for 20 years = more than $59k (average 1% increase) $63K (average 2% increase) + your supplement + your TSP. My estimate you will receive at least $80K without TSP and see if you need to withdrawal your TSP after you retire, if not then you may consider ROTH as evilanne mentioned transferred your ROTH outside to ROTH IRA as it doesn't have RMD.

I recommend all my friends to put in ROTH if they are not going to use their TSP more than 10 years.

So are you saying to roll everything over to Roth now in my current TSP and then all future contributions to ROTH?

At my current tax bracket wouldn't I get killed?

[Aitrus]

I think he's saying "Based on your income, it's likely that you'll have a very good retirement and be in a high tax bracket. What would you rather pay more taxes on when it comes to your TSP? The relatively small amount you put in now? Or the amount you'll have after 20+ years of growth?"

[evilanne]

My estimate you will receive at least $80K without TSP and see if you need to withdrawal your TSP after you retire, if not then you may consider ROTH as evilanne mentioned transferred your ROTH outside to ROTH IRA as it doesn't have RMD.

I recommend all my friends to put in ROTH if they are not going to use their TSP more than 10 years.

So are you saying to roll everything over to Roth now in my current TSP and then all future contributions to ROTH?

At my current tax bracket wouldn't I get killed?

You can't do a roll over while you are working, but yes the taxes would kill you if you did. You do have option of doing an outside Roth in addition to TSP http://www.rothira.com/roth-ira-limits Since you have already paid taxes on the Roth, you don't have to pay a penalty for early withdrawal of your contributions but withdrawing any earning would be subject to 10% penalty. The outside Roth gives you more flexibility when you plan on early retirement. You can determine how much of your TSP you want as traditional or Roth but all matching will still be traditional.

When you withdraw TSP everything will be proportional. For example when you do retire: If you had $75K Traditional and $25K Roth and wanted to withdraw $750 per month, you could set your TSP monthly withdrawal amount at at $1000/month with the TSP Roth portion being transferred directly to outside Roth account. You would receive $750/month (taxable income) and your Roth account would grow by $250/month. This method allows you to avoid RMDs for the Roth portion of the TSP account.

[ksmoly04]

So is it the general consensus then that Roth is the better option if us younger feds are looking at 20+ years before retirement?

[Winner]

Thanks Aitrus and Evilanne!

Sorry for the confusion mmmmmbeer,
I didn't mean to roll over just start new contribution to ROTH TSP then roll over when you retire or start the way Evilanne mentioned above.

Here is the link for anyone interest to the Ins and Outs of the FERS Special Retirement Supplement
http://www.myfederalretirement.com/publ ... lement.cfm

Special Retirement Supplement Formula
SS benefit at age 62 x (# years of FERS service ÷ 40) = Benefit

To calculate the benefit of the Special Retirement Supplement, the formula is: We take the Social Security benefit projection at age 62, we multiply that by the number of years of FERS service, and divide by 40. And 40 is a fixed number in this formula. I get a lot of questions about why the 40. When we're in our workshops, people are always curious why that number is there. It doesn't have anything to do with 40 quarters or 40 credits under Social Security (although that's a good guess). I believe that the reason that 40 is in there is because we're looking at a person's natural working career. We figure they get out of college about age 22 and for Social Security purposes, they expect to be done working by age 62. Now that's not always true, but somewhere in there, and that's 40 years. What this formula is trying to do is to say – of all of your working years, what percentage of those years were as a FERS employee? That's the percentage of the Social Security benefit that you're planning to get at age 62 that will be paid in the Special Retirement Supplement.

[evilanne]

So is it the general consensus then that Roth is the better option if us younger feds are looking at 20+ years before retirement?

I believe so, especially if you are just starting out. I remember having conversation with a younger employee who was making pretty good money and his logic of putting money in Roth was that he had more deductions (married, child & mortgage) now than when he would in retirement. Each situation is different but generally I think that is true especially if you plan to put continuously contribute to TSP and your account will double, triple, quadruple, etc over the years.

[Winner]

So is it the general consensus then that Roth is the better option if us younger feds are looking at 20+ years before retirement?

I said definitely. An average 12% return the balance will be double in less than 7 years and increase 200% under 10 years without new contributions. $100K balance with an average 12% return in 20 years it will increase to $964K (6% return will increase to $320K or 16% is $1.9M).

The opportunity is out there for a GS-05 to get promote to GS-13, GS-14 or GS-15 with 20 years of service.

[Aitrus]

Unless you're in the DoD. You tend to max out at GS-9 or 11 in most career paths, from what I've seen.

[mjedlin66]

Unless you're in the DoD. You tend to max out at GS-9 or 11 in most career paths, from what I've seen.

Go overseas.

[greengrass]

Unless you're in the DoD. You tend to max out at GS-9 or 11 in most career paths, from what I've seen.

Go overseas.

Agreed
I'm one of those lucky ones who went overseas as a contractor with a specialized skill and then converted to a fed and entered as a GS-13. GS-12 overseas are plentiful. It's also a great way to broaden your experience. If you go DoD overseas you'll be in good hands... well that's been my experience. Great opportunities present themselves due to the rotation of military leadership and the unique environment you're operating in. Nothing like it in the US. Great for your career IMHO.

[bad70nova]

I am 100% Roth except the matching, I started in the Roth at 100% last year and have anywhere from 8-10 years left till retirement. There are so many ways to look at what one is better traditional or Roth, it is ever ones own decision to make. For me I would rather pay the taxes now and not worry about it later. If I decide to go in just over 8 years I can collect the SRS for 19 months, just have to wait and see if I go then or wait till 62. No matter what direction people take in their investments the key is to invest and keep investing.