Latest / Federal Retirement Advisors | FedLegacy
Before You Convert Your TSP to Roth, Can You Cover the Tax Bill?
Thinking about converting your TSP to a Roth? The TSP now allows in-plan Roth conversions, but it withholds nothing for taxes. If you convert $100,000 and your tax rate is around 20%, the $20,000 tax bill comes out of your own pocket, plus state tax.
In this session, FedLegacy founder William Smith explains how a TSP Roth conversion compares to converting through an outside traditional IRA, where taxes can be withheld from the conversion itself. He also covers why your last working year is usually the most expensive year to convert, and why the years between retirement and RMDs often give…
The skinny
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