mmmmm...beer 692 Posted November 27, 2006 TSP is the governments version of the 401k.... contributions are pre-tax and they match the first 5%. Over the last several years I've been contribution 15% of my check, thus really putting away 20% with the match. I've been debating on weather to either roll over a percentage of my TSP balance to a traditional IRA and then convert it to a ROTH IRA. or.... Bring my TSP contribution down to the 5% match so essentially 10% and contribute the rest to a ROTH IRA myself with a monthly type automatic deduction out of my check. I realize that because TSP is a pre-tax contribution it lowers my yearly taxible income... thus saving me taxes now, but I keep thinking about the tax free earnings I may get in a Roth. Opinions to help a brutha out as to the better way to go... Share this post Link to post Share on other sites
Guest Davaco Posted November 27, 2006 how old r u? at 70.5, you have to take required minimum distributions, not so in a roth to convert to a roth, if you have a big balance, you will take in the pooper when it comes to taxes Share this post Link to post Share on other sites
mmmmm...beer 692 Posted November 27, 2006 how old r u? at 70.5, you have to take required minimum distributions, not so in a roth 32... I can retire from the Federal service in Law Enforcement at 50.... we need 50/20 and I'll be 50/23 Share this post Link to post Share on other sites
Guest Davaco Posted November 27, 2006 at 32, do both, this will give you tax diverisifcation. if rates go up or down you are covered, plus with a normal retirement account, you get the tax benefits now, which means more coin now Share this post Link to post Share on other sites
edjr 5,590 Posted November 27, 2006 at 32, do both, this will give you tax diverisifcation. if rates go up or down you are covered, plus with a normal retirement account, you get the tax benefits now, which means more coin now I have a roth IRA and my company doesn't match on it's 401k is there another place I can put my money for retirement? Share this post Link to post Share on other sites
mmmmm...beer 692 Posted November 27, 2006 at 32, do both, this will give you tax diverisifcation. if rates go up or down you are covered, plus with a normal retirement account, you get the tax benefits now, which means more coin now Sweet... thanks for the info Dav. Max contributions is for a ROTH is 5k right? How about if I took out a TSP loan from my existing account for 5k and then use that to do the max contribution to a ROTH? Uhmm... I'd pay myself back with interest and be able to jump into the Roth much sooner? Or am I talking stupid "WTF is that guy talking about" ideas? Share this post Link to post Share on other sites
hoytdwow 202 Posted November 27, 2006 I know that 2 TSP = 1 TBSP. Does that help? Share this post Link to post Share on other sites
edjr 5,590 Posted November 27, 2006 Sweet... thanks for the info Dav. Max contributions is for a ROTH is 5k right? How about if I took out a TSP loan from my existing account for 5k and then use that to do the max contribution to a ROTH? Uhmm... I'd pay myself back with interest and be able to jump into the Roth much sooner? Or am I talking stupid "WTF is that guy talking about" ideas? Max roth is 4 k this year, 5 k next year. Share this post Link to post Share on other sites
Franknbeans 46 Posted November 27, 2006 I know that 2 TSP = 1 TBSP. Does that help? It's actually 3 tsp=1 TBSP so no, it doesn't Share this post Link to post Share on other sites
swirvenirvin 25 Posted November 27, 2006 Seems like this comes up every other week over here. Anyways I only do 5% in my TSP then put away 4k a year in a ROTH IRA . It is pretty much what any intelligent fincial planner will tell you to do. More options with the Roth then TSP Also you will be penalized if you take anything away from your TSP.. So your idea will not work Share this post Link to post Share on other sites
edjr 5,590 Posted November 27, 2006 It's actually 3 tsp=1 TBSP so no, it doesn't I know less than anyone on this board and I know 2 tsp = 1 tbsp Share this post Link to post Share on other sites
mmmmm...beer 692 Posted November 27, 2006 Seems like this comes up every other week over here. Anyways I only do 5% in my TSP then put away 4k a year in a ROTH IRA . It is pretty much what any intelligent fincial planner will tell you to do. More options with the Roth then TSP Also you will be penalized if you take anything away from your TSP.. So your idea will not work Not if you take a loan and pay yourself back slowly... See Though it would probably make more sense just to start one now instead. Unless of course I need like 1k or more to do it... then I might as well make the loan and invest the 4k max. Share this post Link to post Share on other sites
cmh6476 760 Posted November 27, 2006 More options with the Roth then TSP Also you will be penalized if you take anything away from your TSP.. So your idea will not work mine's vested after 2 years Share this post Link to post Share on other sites
Guest Davaco Posted November 27, 2006 mine's vested after 2 years yea but if you take a hardship withdrawl or if your plan allows for in-service withdrawls, you pay the tax and a 10% penalty on your withdrawl. with a roth you can withdraw CONTRIBUTIONS, not earngins tax and penalty free, if you have had the account for at least 5 years. https://flagship.vanguard.com/VGApp/hnw/con...IRAsContent.jsp Share this post Link to post Share on other sites
supermike80 1,290 Posted November 27, 2006 The gains you make on a ROTH IRA are not tax free. They are taxed at your regular tax rate. Your contributions are taxed already, so any money you put in, you can remove tax free whenever you want, but any gains you made on those contributions are fully taxed. Share this post Link to post Share on other sites
Guest Davaco Posted November 27, 2006 The gains you make on a ROTH IRA are not tax free. They are taxed at your regular tax rate. Your contributions are taxed already, so any money you put in, you can remove tax free whenever you want, but any gains you made on those contributions are fully taxed. they arent tax deductible, becasue you are putting in net dollars, not gross. earnings are tax free, if you meet certian requirements, ie own the account for 5 years and are older than 59.5 Share this post Link to post Share on other sites
edjr 5,590 Posted November 27, 2006 Even though my company doesn't match, should I use the 401k or is there another 401k I could use? Share this post Link to post Share on other sites
supermike80 1,290 Posted November 27, 2006 they arent tax deductible, becasue you are putting in net dollars, not gross. earnings are tax free, if you meet certian requirements, ie own the account for 5 years and are older than 59.5 You sure about that? I don't think that's right. I think your age isn't relevant. But I could be wrong. ETA...Yep, you're right. I checked it out. I didn't know that! Share this post Link to post Share on other sites
Franknbeans 46 Posted November 27, 2006 I know less than anyone on this board and I know 2 tsp = 1 tbsp you know less than you think... 1 tsp. = 1/6 fl. oz. = 0.5 cl. = 5 ml. 1 Tbsp = 1/2 fl. oz. = 1.5 cl. = 15 ml. A simple google search could get you that info, moron Share this post Link to post Share on other sites
supermike80 1,290 Posted November 27, 2006 I know less than anyone on this board and I know 2 tsp = 1 tbsp Funny I used to think the same thing. My sis in law set me straight a few months ago. I think they changed it man. I was SURE it was 2 to 1. I think I was mis-learned back in elem school. Share this post Link to post Share on other sites
swirvenirvin 25 Posted November 27, 2006 they arent tax deductible, becasue you are putting in net dollars, not gross. earnings are tax free, if you meet certian requirements, ie own the account for 5 years and are older than 59.5 A yep ETA see that SM looked it up Share this post Link to post Share on other sites
