Before You Convert Your TSP to Roth, Can You Cover the Tax Bill?

Thinking about converting your TSP to a Roth? The TSP now allows in-plan Roth conversions, but it withholds nothing for taxes. If you convert $100,000 and your tax rate is around 20%, the $20,000 tax bill comes out of your own pocket, plus state tax. In this session, FedLegacy founder William Smith explains how a TSP Roth conversion compares to converting through an outside traditional IRA, where taxes can be withheld from the conversion itself. He also covers why your last working year is usually the most expensive year to convert, and why the years between retirement and RMDs often give federal employees a lower-tax window. The session also walks through how Roth conversions affect IRMAA and Medicare premiums, what happens to your tax bracket when a surviving spouse moves to single filing status, and how the 10-year rule can push your children into higher taxes on an inherited TSP. Chapters TSP Roth conversions vs. outside IRA conversions Who pays the tax on a TSP Roth conversion Converting while working vs. after retirement FERS pension, FERS supplement, and the gap years How converted Roth money grows tax-free RMDs, the 10-year rule, and inherited TSP money IRMAA and the income limits to watch A $200,000 conversion in two different tax brackets Moving to single filing status after a spouse passes The FedLegacy financial house model Q&A: no cash to pay the tax, opening an outside Roth IRA early, estimating your tax on a conversion, and how RMDs work Want to know how much of your TSP to convert and which years make sense for your household? Book a free Discovery Call with a FedLegacy advisor: https://fedlegacy.zohobookings.com/#/... New sessions every week. Retire on time and with confidence.