WebJun 28, 2016 · For example, if your TSP was made up of 80% Traditional money and 20% Roth money and you began taking $1,200 per month, $960 of that contribution would be taken from your Traditional balance and ... WebMar 1, 2024 · Roth Conversion Point #2: Combat Zone Contributions. Many people have tax-free contributions from combat zone earnings . If tax-free contributions are a …
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WebFirst of all you called a traditional TSP contribution a 401k. That is not correct. The TSP is the government version of a 401k. Your contributions can be either a traditional tsp (pre tax) or a Roth tsp (post tax). Compound interest is not impacted at all by switching. It does not matter if you have two $100k accounts or one $200k account. WebOct 3, 2024 · John retires at the age of 60 and has a TSP with $500,000 in it. John’s income went from $100,000 down to $60,000. John is married so his tax bracket is now 12%. John could convert $17,400 per year to a Roth IRA and stay in the 12% tax bracket. If John’s 500k continues to grow and he waits until he is forced to take distributions, he could ... cyber security nda
Thrift Savings Plans: Benefits for Military Personnel & Federal …
WebThe best way (in my experience) to make the transfer is by first moving your money to a traditional IRA and then over to a Roth IRA. This process is shown in the picture below. … Your decision about Roth and traditional TSP is a choice of when you pay income tax on your TSP contributions and earnings. You can pay taxes either when you earn and contribute the money or when you take it out. There isn’t a set formula to determine which choice is best for everyone, and your decision may change … See more With Roth TSP, your contributions go into the TSP after tax withholding. That means you pay taxes on your contributions at your current income … See more You may consider splitting your contributions between Roth and traditional. Note that if you receive automatic or matching contributions from your agency or service, those … See more With traditional TSP, your contributions go into the TSP before tax withholding. But when you take money from your traditional TSP, you’ll pay taxes on both your contributions and … See more When you take a loan from your account or do a fund transfer or reallocation, the transaction will include a proportional amount from each balance (traditional and Roth). For example, if 80% of your account is in your … See more Web20 hours ago · Dave Ramsey advises federal employees to open a Roth TSP over a traditional account. He also advises you to invest only 5% in a TSP, then switch to a … cybersecurity ncsu