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Are You Waiting Too Long to Plan Your Roth TSP Strategy?

If you are a federal employee in the final stretch before retirement, your Roth TSP conversion strategy could affect far more than just this year’s taxes. In this video, we walk through how traditional TSP balances, FERS pension income, Social Security, RMDs, and Medicare IRMAA can all stack together later in retirement.

Many federal employees assume they will automatically be in a lower tax bracket after they retire. But for FERS retirees with a pension, Social Security, and a large traditional TSP balance, that assumption may create planning gaps that do not show up until years later.

Whether you are trying to reduce future required minimum distributions, create more tax flexibility, or avoid common mistakes around Roth conversions, this episode shows why the timing of your TSP tax strategy matters.

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IN THIS VIDEO YOU CAN LEARN

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Why Roth TSP conversions may matter before federal retirement
How a traditional TSP balance can create future RMD pressure
Why FERS pension income and Social Security can affect your tax bracket
How larger RMDs may increase Medicare IRMAA risk
Why “I’ll be in a lower tax bracket later” may not always apply to federal employees
How a $50,000 per year Roth conversion example may change long-term tax outcomes
Why having outside money to pay the tax bill is important before converting
How Roth planning can give retirees more control over future income

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FEDERAL RETIREMENT RESOURCES

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TSP Roth In-Plan Conversions:
https://www.tsp.gov/investing-strategies/roth-in-plan-conversions/

IRS Required Minimum Distributions:
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds

SSA IRMAA Sliding Scale Tables:
https://secure.ssa.gov/poms.nsf/lnx/0601101020

OPM Retirement Center:
https://www.opm.gov/retirement-center/

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TIMESTAMPS

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0:00 The $80,000 TSP Roth Mistake Federal Employees Should Understand
0:24 Roth Conversions With a Pension While Still Working
0:53 The “Lower Tax Bracket in Retirement” Assumption
1:30 Linda and Susie: Same Federal Retirement, Different TSP Strategy
2:19 Traditional TSP vs. Roth Conversion Planning
3:12 How RMDs Can Push Taxes and Medicare Costs Higher
3:54 Why Roth TSP Money Can Create More Retirement Flexibility
4:32 The Tax Delta: How One Decision May Create an $80,000 Difference
5:14 Why Today’s Tax Brackets Matter for Federal Retirement Planning
5:42 When Roth Conversions May Not Make Sense

Advisory services are offered through CD Financial LLC dba CD Financial, an Investment Advisor in the State of California. Insurance products and services are offered through CD Financial & Insurance Services LLC, an affiliated company.
Opinions expressed herein are solely those of CD Financial and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation.

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