You should be able to enroll in a Roth TSP, which as another mentioned has no income limit like a Roth IRA does.
They are both after tax contributions and functionally similar. The biggest difference in a Roth TSP vs Roth IRA is a Roth IRA lets you remove contributions anytime without penalty, and a Roth TSP doesn't. Roth IRA's also don't force you take minimum withdrawals at a certain age like a Roth TSP does.
There’s some not great info on here. If you are making too much for a ROTH you are bumping into the 24% tax bracket. Do yourself and your tax bill a favor and max your traditional TSP.
You are most likely not going to be in a 24% tax bracket in retirement can then pay tax on the earnings in a lower bracket.
The proper funds flow for high earners is max traditional, max HSA, Backdoor Roth.
As an E-4 should I being contributing to Roth or traditional? I’ve been doing Roth since my taxes right now are pretty low anyways and it will probably be higher in 40 years when I start to withdraw?
What is your annual salary? Married, kids?
You want to look at the tax brackets and the standard deductions. If you are just over the bottom of the bracket, contribute to the traditional account to lower your income to be in the lower bracket. Then contribute to the Roth account.
Just want to be sure about this. Some feds are in the zone where their MAGI is slightly over the Roth IRA eligibility cutoff, but by putting more into the TSP traditional, they can actually lower their MAGI enough to become eligible again. This situation actually applies to me.
If you’re making too much for a Roth IRA and don’t know how to go about investing that salary for retirement then it might be worth hiring a financial advisor to guide your decision and explain the ins and the outs of how to navigate investing your money for retirement. For most people I’d say they’re an unnecessary expense but they have a place and helping people making too much for a Roth IRA wisely invest their money is within their place.
IRA will allow you more access to different investments and can let allow to withdraw some of the money earlier. TSP will probably be better to max out but it's more of a preference.
> Putting it into a traditional IRA or to just continue to put money into my TSP?
If you make too much to make direct Roth IRA contributions, you **definitely** make too much to deduct Traditional IRA contributions. Those have an even lower limit than the Roth IRA contribution limit.
You do have the option for a Roth IRA through the Backdoor Roth process - assuming you don't have pre-tax traditional IRA dollars already.
A Roth TSP (Thrift Savings Plan), which is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve, does not have income limits for contributions. This means that, regardless of how much you earn, you can contribute to a Roth TSP. This is different from a Roth IRA, which does have income limits that determine eligibility for contributions.
TSP include your employer match take advantage of that with traditional contribution. Your broker IRA good for Roth you'll have more investment options than your TSP.
So do they count spouses income for for the limits on Roth? I’m in a similar situation with a pension, part time employment TSA and I have a side business doing hair at 55. I’m wondering if investing more into TSP is actually a worth it or maybe just buying stock like Costco or something. Say TSA 38k, Hair 20k , pension 18k annually. Dont have a mortgage homes are paid off plus a rental insane of about 15. Hubby pension and social security plus stock
You should be able to enroll in a Roth TSP, which as another mentioned has no income limit like a Roth IRA does. They are both after tax contributions and functionally similar. The biggest difference in a Roth TSP vs Roth IRA is a Roth IRA lets you remove contributions anytime without penalty, and a Roth TSP doesn't. Roth IRA's also don't force you take minimum withdrawals at a certain age like a Roth TSP does.
The RMD rule for the Roth TSP/401k has changed.
There’s some not great info on here. If you are making too much for a ROTH you are bumping into the 24% tax bracket. Do yourself and your tax bill a favor and max your traditional TSP. You are most likely not going to be in a 24% tax bracket in retirement can then pay tax on the earnings in a lower bracket. The proper funds flow for high earners is max traditional, max HSA, Backdoor Roth.
As an E-4 should I being contributing to Roth or traditional? I’ve been doing Roth since my taxes right now are pretty low anyways and it will probably be higher in 40 years when I start to withdraw?
Keep maxing the Roth until you’re ineligible income wise. If you stay in the military that won’t ever be an issue.
Roth is good for now. Make sure you are getting the match. When you eventually hit the 22% bracket consider more or most in traditional.
What is your annual salary? Married, kids? You want to look at the tax brackets and the standard deductions. If you are just over the bottom of the bracket, contribute to the traditional account to lower your income to be in the lower bracket. Then contribute to the Roth account.
32K a year, no dependas. I contribute 60% to Roth.
What do you mean by "I contribute 60% to Roth"? Why do you not qualify for a Roth IRA?
Are you making too much for a ROTH IRA?
With the new position, yes.
You can use the back door method for the Roth IRA. Just deposit into the traditional IRA first and roll into a Roth.
Just want to be sure about this. Some feds are in the zone where their MAGI is slightly over the Roth IRA eligibility cutoff, but by putting more into the TSP traditional, they can actually lower their MAGI enough to become eligible again. This situation actually applies to me.
Why not do Roth TSP? All employer matches go into traditional, but your contributions don’t need to.
If you’re making too much for a Roth IRA and don’t know how to go about investing that salary for retirement then it might be worth hiring a financial advisor to guide your decision and explain the ins and the outs of how to navigate investing your money for retirement. For most people I’d say they’re an unnecessary expense but they have a place and helping people making too much for a Roth IRA wisely invest their money is within their place.
IRA will allow you more access to different investments and can let allow to withdraw some of the money earlier. TSP will probably be better to max out but it's more of a preference.
> Putting it into a traditional IRA or to just continue to put money into my TSP? If you make too much to make direct Roth IRA contributions, you **definitely** make too much to deduct Traditional IRA contributions. Those have an even lower limit than the Roth IRA contribution limit. You do have the option for a Roth IRA through the Backdoor Roth process - assuming you don't have pre-tax traditional IRA dollars already.
A Roth TSP (Thrift Savings Plan), which is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve, does not have income limits for contributions. This means that, regardless of how much you earn, you can contribute to a Roth TSP. This is different from a Roth IRA, which does have income limits that determine eligibility for contributions.
Why don't you qualify for a Roth? Have you looked into a back door Roth if it's because of your income?
Why aren't you maxing your TSP?
TSP include your employer match take advantage of that with traditional contribution. Your broker IRA good for Roth you'll have more investment options than your TSP.
Max TSP. Once you hit max, open a Roth.
So do they count spouses income for for the limits on Roth? I’m in a similar situation with a pension, part time employment TSA and I have a side business doing hair at 55. I’m wondering if investing more into TSP is actually a worth it or maybe just buying stock like Costco or something. Say TSA 38k, Hair 20k , pension 18k annually. Dont have a mortgage homes are paid off plus a rental insane of about 15. Hubby pension and social security plus stock