Is anyone looking into this?…understanding the fact that your adding to your taxable income for the year on the amount converted.
Thoughts on taking advantage of traditional to Roth conversions in your TSP in 26’?
byu/CR4320 inMilitaryFinance
Posted by CR4320
5 Comments
I’m in the middle of thinking about it. I understand the argument for tax diversification but seeing as our pension is taxable and when the time comes so will social security it’s definitely something to consider, but I’m very much in the early stages of analyzing it.
Considering it. My pension combined with 401k, TSP and potential SSA plus possible disability, I think I’ll make more money and thus be in a higher tax bracket in retirement than I am now (plus subject to state tax which I’m not subject to while on active duty). All that has me thinking that paying the taxes now rather than later is in my interest. Since the rollover counts as income, I’m going to do it in stages to avoid putting myself in a higher bracket. Gonna suck up the tax bill. Ran a few scenarios and think I’ll do it over the course of 3-5 years.
Considering it. My husband has some traditional from before Roth was available. Our current tax rate is either 0% or negative, so it would make sense, but I need to crunch the numbers.
Its really attractive for anyone doing a 365 in a combat zone and also planning to retire. It also makes the ability to overload the tsp from a combat zone much more interesting.
I wasn’t aware that this was a thing until the other post a day or two ago. I have about $30k in my nontaxable CZTE traditional and about $5k in my regular traditional. I’m definitely going to convert it all. The $1,000 or so I’ll pay in taxes will be well worth the gains over the next 25 years.