Question about Traditional TSP vs. Roth TSP

[MrSnrub]

I am currently in the Traditional TSP and am contemplating changing to the Roth TSP. I currently contribute the max $693 per paycheck. Assuming I am in the 25% tax bracket, does that mean my paycheck deduction will be $693 x 1.25 = $866.25, or is there more to it than that?

[mmmmmbeer]

I did that by accident. I was going to go to full Roth but cancelled it, so it did it for one check.

The $692 came out as always, and I saw about a difference in my check of $172.24 = $865.24

***edit *** when I out the roth amount it I had put $692 by accident, but looks to be exactly on.

[evilanne]

mmmmbeer is correct...TSP is the same & the difference will be in increased tax withholding, which will adjust automatically through your payroll office. It is a good idea to double check that your withholdings are correct, especially if you owed taxes when filed for 2016.

[Jokerswild]

I recently decided this route too. Had a 50/50 blend to my TSP, why I decided to go 100 into traditional instead, the same amount will be deposited in my TSP, but I'll retain more in my regular check due to cutting down taxable income. Yes, you'll eventually pay more tax on tail end when withdrawing from TSP, but by that time we will be rich beyotch... Lol

[baroclinic]

When you put in traditional, anything you put into Traditional is not taxed, so the difference will be based on your filing status and the # of dependents you put down when you started the job (the form W-4 you filled out).

Correct math might be more like: (taxable income - $693) * .25 = X
X + $693 = total federal taxes and contributions missing from your paycheck.

That is just a poor example, only an example.

I only go traditional to cut my AGI below 31,000, otherwise, I'd put Roth. Even then, I would put $5,500 Roth IRA before TSP, I feel like TSP fund choices are really kinda bleh.

[bad70nova]

This is a choice each person has to make. As the others have said your math is correct. I am 100% roth, just my choice, I pay the taxes now while I am working and don't worry about them later in life. As for the tax bracket everyone gets wrapped around the axle over it. Remember you only pay taxes on the portion that falls into that tax bracket not your entire income.

[MrSnrub]

Thanks for the info, y'all.