TSP contributions are pre-tax, so TSP participants would owe income taxes on the full balance converted to a Roth TSP. A TSP participant converting a $200,000 TSP to a Roth TSP may owe $60,000+ up-front in taxes. Why would anyone do this? Tax rates are going up. It may be better to "pre-pay" at today's income tax rates than to pay taxes upon withdrawal in retirement, when who knows how high the federal income tax ...more »
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