Timothy Sumer

Thrift Savings Plan explained. Should you chose the Roth TSP or Traditional TSP? Roth TSP is typically better for those who start investing early and often. Traditional TSP is better for those that are older or closer to retirement and have not invested at all. This is because there is one deciding factor that makes Roth or Traditional better than the other: income tax. Roth means you pay taxes now and don't owe any taxes later. Traditional means you defer paying taxes now and pay them when you withdraw from your TSP. You're going to take a tax hit now or later... so will your income tax bracket be lower now or later? If you think you're going to retire "better off" and generate more income in retirement then you do now, then do Roth TSP. If you only plan on collecting social security and maybe a small pension, therefore, you're retirement income will be less than it is now, do Traditional TSP. As a loose rule of thumb I would say if you are within...