In this episode, Ed and Dan explain the newest Thrift Savings Plan (TSP) option: Roth TSP in-plan conversions, starting January 28, 2026. Federal employees, retirees, and spouse beneficiaries can now convert portions of their traditional TSP accounts into Roth TSP accounts. This episode breaks down eligibility, tax considerations, and the two separate five-year rules that govern Roth TSP withdrawals, helping listeners understand when conversions are advantageous and how to avoid unexpected taxes or penalties.
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FedLife Podcast | Ep. 162: Roth TSP In-Plan Conversions
Join us as Dan and Ed break down the new Roth TSP in-plan conversion option and highlight key financial and tax considerations for federal employees and retirees.
In this episode, you’ll learn:
- Who is eligible for Roth TSP in-plan conversions
- Key federal and state income tax implications
- How to determine if a Roth TSP conversion makes financial sense
- The two five-year rules: one for Roth TSP earnings and one for converted contributions
- Examples illustrating tax-free withdrawals and early withdrawal penalties
- Timing strategies for conversions and considerations for retirement planning
Source Article: https://stwserve.com/some-important-questions-for-traditional-tsp-participants-to-consider-before-performing-roth-tsp-in-plan-conversions/
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