Roth TSP vs. Traditional TSP Calculator (2026)
For most savers, the Roth vs. traditional choice comes down to a single question: will your tax rate be higher today or in retirement? For federal employees the answer is more complicated. Your FERS pension provides a guaranteed taxable income floor in retirement, the FERS supplement creates a pre-62 income phase, and large traditional TSP balances can push retirement MAGI over IRMAA thresholds — adding Medicare surcharges that don't appear in generic calculators. This tool uses your actual numbers.
- FERS pension as a taxable income floor. A GS-14 retiree receiving a $90,000/yr pension is already in the 22% bracket (single filer) before any TSP withdrawal. Traditional distributions stack on top, potentially pushing into 24%+.
- Roth TSP has no lifetime RMDs starting in 2024 (SECURE 2.0 §325). Traditional TSP forces RMDs at age 73–75 that can push MAGI over IRMAA thresholds indefinitely; Roth TSP does not.
- Mandatory Roth catch-up for employees with prior-year FICA wages above $150,000 (SECURE 2.0 §603, effective 2026). If this applies, your catch-up contributions are Roth by law — regardless of your preference.
When Traditional TSP makes sense for federal employees
Traditional contributions lower your taxable income today — you receive an immediate tax deduction and defer the bill until withdrawal. They make the most sense when your working-years marginal rate is meaningfully higher than your expected retirement rate. Common federal employee scenarios where traditional wins:
- GS-15 and SES employees in the 32–35% bracket who expect a more modest pension and modest TSP withdrawals in retirement (landing in the 22–24% range). The rate differential is large enough to clearly favor traditional.
- Employees close to retirement (within 5–10 years) in their peak earning years. Current income is at its lifetime high; retirement income from a fixed pension + modest TSP draws may be substantially lower.
- Anyone using the post-retirement Roth conversion strategy. Deliberately building traditional TSP now to convert in the low-bracket window between FERS retirement (age 57 MRA) and Social Security start creates a tax-planning lever you can pull strategically. See the Roth conversion strategy guide for the full analysis.
When Roth TSP makes sense for federal employees
Roth contributions mean no deduction today — you pay taxes now at whatever your current rate is, and qualified withdrawals at 59½+ (with 5-year holding) are completely tax-free. Roth wins when your retirement income will equal or exceed your current income, or when traditional balances create specific risks:
- Early-career employees in the 12% or low 22% bracket. A GS-7 or GS-9 early in their career may be at a low bracket that they'll never see again after promotions. Paying 12% now vs. 22% later is a significant advantage.
- Employees with large projected traditional TSP balances. A $1M+ traditional TSP balance will generate $40,000+/yr in RMDs starting at age 73–75, stacked on top of FERS pension, Social Security, and any other income. This often creates unnecessary IRMAA exposure. Roth TSP has no lifetime RMDs (SECURE 2.0 §325 effective 2024).
- FEHB and IRMAA cliff management. IRMAA is based on MAGI — your income before standard deduction. Traditional TSP distributions count in full; Roth qualified distributions do not. A FERS retiree with $100K pension + $36K traditional TSP distribution = $136K MAGI, well into IRMAA tier 2 territory (>$129,000 single). Replacing some of those TSP draws with Roth distributions can reduce the Medicare surcharge.
How traditional and Roth TSP compare at a glance
| Feature | Traditional TSP | Roth TSP |
|---|---|---|
| Tax treatment of contributions | Pre-tax (reduces current taxable income) | After-tax (no current deduction) |
| Tax treatment of qualified withdrawals | Fully taxable as ordinary income | Tax-free (59½+, 5-year holding met) |
| Counts toward IRMAA MAGI | Yes — full withdrawal amount | No — qualified distributions excluded |
| Lifetime RMDs (age 73–75) | Yes — required per IRS Uniform Lifetime Table | No — eliminated by SECURE 2.0 §325 (2024+) |
| Agency matching contributions | Always traditional (statutory, 5 U.S.C. § 8432) | N/A — match goes to traditional side only |
| Mandatory catch-up rule (§603) | Not applicable for catch-up if wages >$150K | Required for catch-up if prior-year FICA wages >$150K |
| Rollover to IRA | Rolls to Traditional IRA — RMDs continue | Rolls to Roth IRA — no future RMDs |
The mandatory Roth catch-up rule (SECURE 2.0 §603)
Starting in 2026, employees whose FICA wages in the prior year exceeded $150,000 are required to make any catch-up contributions as Roth — they cannot direct catch-up dollars to the traditional side. The TSP payroll system handles the designation automatically. Affected employees include most GS-15 and SES employees (particularly those in high-locality areas), as well as high-earning GS-14s with significant locality pay differentials.
If this applies to you: the base $24,500 contribution can still go traditional or Roth at your election. Only the catch-up amount ($8,000 for ages 50–59 / 64+; $11,250 super catch-up for ages 60–63) is mandatorily Roth. These contributions do count toward your Roth balance and follow the same 5-year/59½ qualified distribution rules.
Sources
- IRS — 2026 tax inflation adjustments including OBBBA amendments (IRB 2026-19)
- IRS Rev. Proc. 2025-32 — 2026 annual inflation adjustments (original; superseded in part by OBBBA)
- TSP.gov — Contribution types (agency automatic and matching)
- TSP Bulletin 25-3 — 2026 annual limits for contributions
- CMS — 2026 Medicare Part B premiums and IRMAA thresholds
2026 tax bracket thresholds: IRS Rev. Proc. 2025-32 as amended by OBBBA (IRB 2026-19, May 2026). Single: 10% ≤$12,400; 12% ≤$50,400; 22% ≤$105,700; 24% ≤$201,775; 32% ≤$256,225; 35% ≤$640,600; 37% above. MFJ: 10% ≤$24,800; 12% ≤$100,800; 22% ≤$211,400; 24% ≤$403,550; 32% ≤$512,450; 35% ≤$768,700; 37% above. Standard deductions: single $16,100; MFJ $32,200. IRMAA first-tier threshold: $109,000 single / $218,000 MFJ (2026 MAGI). Values current as of August 2026.
The Roth vs. traditional decision is just the start
Getting the allocation right matters — but so does knowing when to shift the split as you approach retirement, how to model the Roth conversion window between your FERS retirement date and age 62, and whether a partial TSP rollover to IRA makes sense for your specific situation. A federal-benefits specialist can integrate your FERS annuity, TSP balance, Social Security timing, and FEHB/Medicare coordination into a single retirement income model.
FederalEmployeeAdvisorMatch connects you with fee-only advisors who specialize in FERS, TSP, and federal retirement benefits — no commissions, no product sales.
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