I understand that one should choose a traditional IRA/401(k) if they believe that their tax bracket will be smaller when they retire and otherwise use a Roth. But how do you make that determination?
Right now, I have a Roth IRA that I max out each year and a TSP (basically a 401(k)) in which my contributions go into a Roth bucket and matching funds go into a traditional bucket by default; there's no way to change how this is classified. I'm not maxing it out yet, and won't for awhile, but I'm working on it. I'm starting to question whether that is the right setup. When I retire, I'll have a pension worth ~$24k a year in today's dollars, assuming that I make it to minimum retirement age, otherwise I'll defer the pension, but it will be reduced by 1% for each year until MRA. For example, if I retire at 52 rather than 57 then I'll only get ~$21k a year and will have to defer those payments for five years.
The plan is to move somewhere warm and cheap so I can't see needing to pull more than $25k a year from my TSP, maybe a little more depending on what Central American inflation looks like by then so $650-750k is my goal for the TSP and maybe the IRA. The IRA is meant to be college savings for my kid, so it should probably stay Roth. There are various reasons that I use a Roth instead of a 529 but the main one is that I live in a state that only recognizes it's own plan for tax purposes, but also has a history of severely mismanaging college plans. I usually don't weight it very heavily in my retirement plans.
So, given that load of babble, would you start contributing more to a traditional TSP and up the amount you could save by a percentage or two or continue to contribute to the Roth version at the current percentage? I think I know the answer, but want to make sure that there's not something I'm not thinking about.