Some of the posts here are missing the fact that these are both ROTH options, and that this is not a regular, taxable TSP account The Roth TSP, like a Roth IRA, is tax-free growth. This is not comparable to a 401k, it is comparable to a Roth IRA. (Regular TSP=401k with no match for military; ROTH TSP=Roth IRA).
On a related note, I have been told time and time again that you can contribute to both, and that the combined total doesn't count agains the limits. IOW, you can put the annual max in a Roth IRA, and then put additional money in the Roth TSP.
The Roth TSP is essentially a Roth 401k, not a Roth IRA. Yes they are bot Roth, but
you can not withdraw contributions before age 59 1/2 with the Roth TSP. You can do this with a Roth IRA. That is the main difference in my opinion.
The Roth TSP is also subject to required minimum distributions (RMD) just like a 401k, however you can just convert it to a Roth IRA if RMDs become an issue when you turn 70.
Yes, you can contribute up to $17,500 ($23,000 if over 50) to your TSP, all Roth, or all traditional, or any combination of the two. You can still contribute $5,500 ($6,500 if over 50) to an IRA in addition to your TSP.
Right now I'm on steps 1 and 2.
I'm eligible to retire at 57, so I may need the money before 60. It would be nice to have it available, just in case.
I'm in the 25% tax bracket.
I'm assuming your pension will start as soon as you retire. If you are planning to work until 57, you probalby wouldn't need a whole lot of money to tie you over until you are 59 1/2, but I'm sure you will want some. If you can't max out your TSP and IRA, I think putting money in a Roth IRA is preferrable to a taxable account, even if you are fairly certain you will need to use the money before you turn 59 1/2.
If you think you will be in a lower tax bracket when you retire, you may want to consider the tradional TSP. Possibly max out your Roth IRA, then put as much as you can into the traditional TSP?
Oops. I just fout this article:
You can withdraw from your 401k if you retire after age 55.This kind of contradicts what I said above. I'm not sure it applies to the TSP, but I think to would.
you might be fine going 100% TSP afterall.