Author Topic: Roth 457/Roth TSP or traditional  (Read 807 times)

localfed

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Roth 457/Roth TSP or traditional
« on: May 18, 2016, 11:25:36 AM »
I am starting a new job with a 457 plan that has both the Roth and Traditional Option.  I also have my Army Reserve TSP account that I will also contribute to.  I have always chosen the Traditional options because they predated the ROTH option when I first opened these accounts. 

I'm thinking that a good option might be to do one with the ROTH option and the other with the Traditional option to split it up.  Based on the pension plan I'm in, my pension will be pretty darn close to what I will make during the last 3 years of my job (average of the 3).

Maybe it might be a good idea to put all of the money in ROTH accounts to benefit from the tax free distributions later in life.  Does anyone have any insight or experience contributing to both of these types of accounts?

seattlecyclone

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Re: Roth 457/Roth TSP or traditional
« Reply #1 on: May 18, 2016, 11:54:33 AM »
The dominating factor in this decision is whether your tax bracket will be higher now or during retirement. Since you already have pretty sizable traditional retirement account balances (that will count as taxable income when you withdraw) and you're expecting a pension that will be the same as your ending salary, Roth contributions might make a lot of sense for you.