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Administered by the Federal Retirement Thrift Investment Board, this defined contribution plan for federal employees has roughly 4,614,874 participants, and over $358 billion in assets under management. Ask your TSP questions and post related topics here.

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#1 Posted : Wednesday, September 12, 2018 7:28:19 AM(UTC)

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My spouse and I have been retired 5 years. We are 64 years old. I am CSRS and she is CSRS-Offset. We have about 275K combined (185K/90K) in our traditional TSP accounts. Wondering about the feasibility of a rollover of our TSPs into Roth IRAs. We both currently have Roth IRAs with Vanguard. I know we would have to pay taxes on this money. We are in the 22% tax bracket with about 95K yearly in taxable income jointly. The upper limit of the 22% joint tax bracket is 165K. So, in theory, I believe we could rollover about 70K while remaining in the 22% bracket. This, of course would generate an additional 15K or so in taxes. If we were to do this for 4 or 5 years we could have entire TSP in our Roth IRAs. A couple reasons: 1). I really don't anticipate "needing" the TSP money and would like to avoid having to take the RMDs at age 71. 2). If and when the tax cuts expire, we could very well end up in a higher tax bracket down the road when RMDs would kick in. Wondering if anyone else has done this or considered it. Smart or dumb???
The HalfBreed  
#2 Posted : Tuesday, November 20, 2018 10:02:01 PM(UTC)

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I'm also retired CSRS in 2012, with investments in Vanguard (Wellesley and Wellington Funds) and there are pros and cons to what you're thinking, but obviously, you've done your homework. A Back Door rollover is what you're apparently wanting to do. I've seen many people wanting to do that for various reasons, yours being one of the top reasons indeed.

Are you familiar with the Bogleheads forum ? Whether yes or no, maybe log in over there and get other ideas as well. Many Bogleheads are Federal employees or retirees, and many of us
are also over here as well.


I took advantage of the VCP program before I retired, and learned a lot about it here, but mainly on the Bogleheads forum.
Not sure if you've heard about it, but it is open to CSRS and Offset folks, but not known by many in HR (personnel office)and confuses many of them as they are FERS folks.
Anyway, it is a way to MAX FUND a ROTH IRA with up to 10% of your Federal Employee earnings over your lifetime, putting that money into the VCP, then transferring it into
a ROTH IRA in one fell swoop, which I did. Being retired now, that's water over the bridge, but if you know anyone still working.....

I'm still considering doing the Back Door rollover, but....sigh.

VCP Program radio Federal News Network Radio - https://federalnewsnetwo...tribution-program-works/

One thing everyone at Vanguard Forums say is to NEVER leave the TSP, because you'll never find a Bond Fund type investment like the G Fund. Many wish they had the opportunity for it.
For that reason alone, I will stay TSP. Once you remove your funds and do a Roth conversion, you can't bring that money back into the TSP (so far, but those rules may change)

Hope to see you over there in Vanguard Forums if you're not there already. Good Luck !
RETIRED 12/19/2012 @ age 57
Good Bye Tension...Hello Pension !
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