Dear Participants:
I am very pleased to announce that the TSP has implemented the Roth TSP feature. Agencies and services can now begin offering this opportunity to eligible employees and members of the uniformed services.
Roth TSP is an important new feature that will give you greater flexibility in the tax treatment of your employee contributions. It will allow you to make after-tax contributions to your TSP account that will be tax-free when withdrawn. The significance of Roth contributions is that their earnings are also tax-free when withdrawn (as long as IRS requirements are met).
I urge you to carefully consider whether Roth TSP could be to your advantage. This is a decision of tax strategy, and as with all tax matters, you should consult a qualified tax or financial advisor for information on your specific tax situation. In the meantime, you can get answers to many of your general Roth TSP questions here on the website. Additional information is on the way, including a Contribution Decision Wizard (or calculator), which will allow you to compare the impact—now on your paycheck, and later on your account balance—of selecting Roth contributions or traditional contributions. Many forms and publications available on the website, as well as other website content, have been updated to include information about the Roth TSP feature.
Because implementation of Roth TSP involves technical and programmatic modifications to payroll systems, not all agencies or services are ready to participate in Roth TSP at this time. Check with your own agency or service to find the date when you can begin making Roth employee contributions.
Greg T. Long
Executive Director
