[Amy]

OK, I need you math wizards out there. If I’m contribute 30k in my TSP and I’m in the 32% tax bracket should I put the money in the Roth tsp or Traditional TSP. Working for federal govt you are allowed to put it into Roth TSP regardless of income. To make it easy let’s say I won’t draw on that money for 15 years from now.

Is it better to get tax break now or not pay taxes on earnings the fund makes growing for 15 years? I was thinking of doing 15k in each. Taxes will be insane this year but i have the money but I’ll be more worried about $ in 15 years. Retiring 12/30/28. Thoughts?

[Jon]

If in a higher tax bracket now, vs in retirement, then traditional is better. If the same bracket, makes no difference you end up with the same balance.

You might consider looking at the estate implications of Roths (given Secure Act 2.0), if that is a factor.

[Rolf]

Unless you are still going to be in the 32% bracket in retirement, do traditional.

[Michael]

Do Traditional now and get the 32% break now at the federal level because you expect to be in a lower bracket later when pulling the money out. What is your state?

That factors in as well.

Also, keep in mind starting next year, the catch up contributions can only be Roth, they have taken away the Traditional option on all catch up contributions for those 50 and over starting in 2024.

Don’t miss: did you still do 25% of take home pay for mortgage/taxes/insurance?

[Jason]

Generally speaking, I suggest contributing Traditional to reduce current taxable income, followed by Roth conversions during low income years for tax diversification and reduce RMD liability.

[Author]

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