This week Thrift Savings Plan (TSP) announced that May 7, 2012 will be the day that the TSP will begin to accept Roth TSP contributions.
With the addition of the Roth TSP option, participants can choose to invest pre-tax or after-tax dollars in any of the TSP funds, up to the Internal Revenue Code limits (for 2012 the maximum amount that you can contribute to TSP is $17,000). TSP participants can currently invest in ten different funds: the five Lifecycle (L) Funds, the Government Securities (G) Fund, and the four broadly diversified stock and bond funds – the Fixed Income Index Investment (F) Fund, the Common Stock Index Investment (C) Fund, the Small Capitalization Index Investment (S) Fund, the International Stock Index Investment (I) Fund.
Money already in your account when you begin making Roth contributions will remain part of your traditional balance. You will not be able to convert it to Roth.
Please visit the TSP website (www.tsp.gov) for more information to help you decide if this new option will benefit you retirement planning.