Posted on Jun 24, 2018
MAJ Assistant Operations Officer (S3)
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Well, I’m glad you asked because I guarantee you that you are not the only one. Many service members have no idea what the key differences are. They simply stick with the default option (Traditional) and hope for the best. However, the fact that you are even asking the question is a great sign! It means that you likely have a basic understanding of the Thrift Savings Plan, have already started contributing at least 5-10% of your base pay, and know which Funds you want to invest in.

This article is the next step in the progression for understanding how the Thrift Savings Plan works and will help you understand the key differences between the two systems.

This decision is important! You could potentially pay THOUSANDS of dollars in extra taxes if you pick the wrong option for your situation.

For tonight’s match-up, I give you “Ole Faithful” (Traditional TSP) vs the “New Hotness” (Roth TSP)! Two men will enter, one man will leave!

http://www.yourewelcome.blog/2018/06/24/traditional-vs-roth-tsp/
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Responses: 5
MCPO Roger Collins
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Too many future unknowns. When you are investing and your income today are the only known. I have been investing heavily since my military retirement and over a few decades, with about a 30% cash and 60% mutual funds. For years I wasn’t aware of Roth and its value later in life. Today, my income, primarily due to the RMD tax provision, is the highest ever. I can only imagine how my taxes would have improved with all Roth’s.
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MAJ Ken Landgren
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It will take a complicated cash flow analysis to quantify the two methods.
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