TSP Roth Conversion update

[James48843]

A good article over on FedSmith, talking about the proposal on TSP regular to TSP Roth conversion- it’s worth reading.

See : https://www.fedsmith.com/2025/10/15/frtib-issues-tsp-in-plan-roth-conversion-proposal/

From the article;”:

“
The Federal Retirement Thrift Investment Board (FRTIB) has issued a significant proposal that would enhance the flexibility of federal employees and retirees in managing their Thrift Savings Plan (TSP) accounts. The proposal, published in the Federal Register, would enable investors in the TSP to convert existing traditional (pre-tax) TSP balances into a Roth account (after-tax) balances within the plan—a feature that has long been available in many private-sector 401(k) plans but not in the TSP.

There are significant advantages to a Roth account. There are also significant tax implications TSP investors have to consider.”

Read more at:

https://www.fedsmith.com/2025/10/15/frtib-issues-tsp-in-plan-roth-conversion-proposal/

 

[James48843]

I was able to find a really good article on FedSmith about how Required Minimum Distributions really can affect the price of your Medicare premium, particularly as you get older, and why it’s good to calculate where you are each year, before the end of the year, if you want to take a distribution, or a Roth conversion, for a chunk of that money each year.

For me, it works out that I will want to do at least $25-$50k a year convert to Roth even before I hit the age to need to do required minimum distributions. Understanding your options can save you tens of thousands each year!

Here is the FedSmith article- on how RMDs and conversions to Roth create taxable events- and can affect your Medicare premiums.

https://www.fedsmith.com/2024/10/23/rmds-are-silently-increasing-medicare-premiums/

 

[tsptalk]

Good stuff, James! Thanks!