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TSP In‑Plan Roth Conversions — Fine Woodworking Your Retirement
🦊 Welcome Back to the Foxhole
Rob and Omen open the episode with gratitude for a recent jump in listeners (thank you for sharing the show!) before diving into a timely and highly requested topic: TSP in‑plan Roth conversions. This is a practical, no‑nonsense conversation designed to help servicemembers and federal employees understand what’s now possible—and what to watch out for.
📅 This Week in History
Omen highlights the February 23, 1945 flag raising on Iwo Jima.
📰 Headline of the Week
“401(k) balances Rose 13% in 2025” (Michael Popke - Think Advisor)
Key points discussed:
- Average balances rose 13% to over $113,000
- Average contribution rate held steady at 7.2%
The real driver? Automation.
🧠 Main Topic: TSP In‑Plan Roth Conversions
The core of the episode focuses on what it means to convert traditional TSP dollars to Roth TSP inside the plan.
⚠️ For a full Roth conversion primer, see Episode 10.
Why this matters:
- You no longer have to wait until separation to convert
- Especially useful for servicemembers in historically low tax brackets
- Allows more flexibility and long‑term tax planning
💰 Taxes: The Reality
- Conversions are taxable income in the year completed
🚫 Do not withhold taxes from the conversion (especially under age 59½).
🧮 Know Your Tax Bracket
Rob and Omen encourage listeners to:
- Check Line 15 on Form 1040 (taxable income)
- Compare it to current tax brackets
🧰 Tools Mentioned
- Dinkytown Tax Calculator – quick, rough tax projections
- TSP Roth In‑Plan Conversion Calculator – more detailed, very powerful
🎯 Strategic Reasons to Convert
- Filling up a low tax bracket
- Using a refund intentionally
- Reducing future RMDs
- Converting during market downturns
- Building tax diversification (Roth + Traditional + Taxable)
📝 TSP Rules to Know
- Up to 26 in‑plan conversions per year (per account)
- Minimum conversion: $500
- Must leave $500 in tax‑deferred TSP (with limited exceptions)
- Expect a 1099‑R the following January
📣 Final Notes
Questions for the show? Email [email protected].
- Read “Don’t over Roth Your Retirement”
- Book a meeting with Omen
- Book a meeting with Rob
View all episodes
By Rob Moore and Omen Quelvog🦊 Welcome Back to the Foxhole
Rob and Omen open the episode with gratitude for a recent jump in listeners (thank you for sharing the show!) before diving into a timely and highly requested topic: TSP in‑plan Roth conversions. This is a practical, no‑nonsense conversation designed to help servicemembers and federal employees understand what’s now possible—and what to watch out for.
📅 This Week in History
Omen highlights the February 23, 1945 flag raising on Iwo Jima.
📰 Headline of the Week
“401(k) balances Rose 13% in 2025” (Michael Popke - Think Advisor)
Key points discussed:
- Average balances rose 13% to over $113,000
- Average contribution rate held steady at 7.2%
The real driver? Automation.
🧠 Main Topic: TSP In‑Plan Roth Conversions
The core of the episode focuses on what it means to convert traditional TSP dollars to Roth TSP inside the plan.
⚠️ For a full Roth conversion primer, see Episode 10.
Why this matters:
- You no longer have to wait until separation to convert
- Especially useful for servicemembers in historically low tax brackets
- Allows more flexibility and long‑term tax planning
💰 Taxes: The Reality
- Conversions are taxable income in the year completed
🚫 Do not withhold taxes from the conversion (especially under age 59½).
🧮 Know Your Tax Bracket
Rob and Omen encourage listeners to:
- Check Line 15 on Form 1040 (taxable income)
- Compare it to current tax brackets
🧰 Tools Mentioned
- Dinkytown Tax Calculator – quick, rough tax projections
- TSP Roth In‑Plan Conversion Calculator – more detailed, very powerful
🎯 Strategic Reasons to Convert
- Filling up a low tax bracket
- Using a refund intentionally
- Reducing future RMDs
- Converting during market downturns
- Building tax diversification (Roth + Traditional + Taxable)
📝 TSP Rules to Know
- Up to 26 in‑plan conversions per year (per account)
- Minimum conversion: $500
- Must leave $500 in tax‑deferred TSP (with limited exceptions)
- Expect a 1099‑R the following January
📣 Final Notes
Questions for the show? Email [email protected].
- Read “Don’t over Roth Your Retirement”
- Book a meeting with Omen
- Book a meeting with Rob