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The time now is Thu Sep 09, 2010 3:09 am
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Roth Plan
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olijoel
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Post Roth Plan 
What is your opinion about TSP “Roth plan”? Is it a benefit for successful TSP investors? I really don’t understand this plan. Apparently you pay tax at the beginning and not at the end when you retire. Confused
Tue Jul 27, 2010 11:06 am View user's profile View FantasyTSP account Send private message
TSPking
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I don't know the specifics of the TSP Roth Plan. But for regular Roth IRA's it is as you describe paying taxes at contribution.

If this is an advantage for you or not depends on whether you think you will be in a higher tax bracket when you retire (withdraw) compared to now (contribute)


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flight23
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What I cant figure out/find anywhere is how matching contributions will be handled. Right now with the traditional IRA the govt matches funds, so for example for every 16,500 I put in each year they put in say 5K. If we do the Roth we will be taking after tax income but will they still match, and if they match will we be paying taxes *now* on the contributions they make? If the matching is done with no tax burden on us then the Roth IRA is a no brainer for young employees.
Tue Jul 27, 2010 1:06 pm View user's profile View FantasyTSP account Send private message
olijoel
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Post second question… 
Ok I understand the bracket issue better… but is the money you’re going to save cause by the bracket difference from what you would pay in tax now from what you would pay when you retire be more money than what a successful TSP investor make in Roth Plan?
Tue Jul 27, 2010 1:32 pm View user's profile View FantasyTSP account Send private message
Winner
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As far as I know that the only different between the Roth TSP & Roth IRA is no income limitted for Roth TSP since Roth IRA has limitted income. Go to this link for roth IRA conversion http://www.cambridgefp.com/cambridgefp.aspx?MyMenu=Submenus/planningret&MyPage=PlanningIntro.asp&SessionID=27079171


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