May 7, 2012 — This week on For Your Benefit co-hosts Bob Leins and John Elliott present a primer on the TSP.
This show serves as a lead-in for the May 14 edition, which will feature the TSP’s Executive Director Greg Long. Joining Long to discuss the new Roth TSP program will be the Thrift Savings Plan’s spokesperson as well as a tax attorney.
The Roth TSP differs from the “traditional” TSP in that contributions to it are not tax-deductible, but the distributions from it in retirement will be tax-free. This means that it would be an advantageous choice for those who anticipate being in a higher tax bracket in retirement than they are at the present time.
Either way, as Leins points out during today’s show, “you’re going to pay the tax person sooner or later.”
“So now it’s your decision,” he adds. “Do you pay the tax person up front, by putting money into a Roth TSP, or do you pay the tax person later, when you take the money out of the traditional TSP?”
Leins and Elliott suggest visiting the TSP website for more information.
Many federal agencies are offering the TSP option as of today, with more parts of the federal government joining the program in the weeks to come.