TSP Options: Traditional v. Roth

Ian Bergstrom — Wed, 26 Nov 2025 22:03:26 +0000

Traditional v. Roth...

This is the age old question that one must ask themselves when setting up a retirement account. And while this is focused on the Thrift Savings Plan (TSP), this post will assist in answering the question for an Individual Retirement Account (IRA).

And why the hell are there two types to begin with? Well, it's simple -- taxes. It's all about taxes.

Traditional

Simply: Money goes in untaxed, but is taxed when you withdraw it at retirement.

Claim Contributed $$ as a Write-off on tax return
Contributions is not limited by income
Has an annual limit on how much you can contribute
Any withdrawals before 59 1/2 are subject to income tax and a 10% penalty (some exceptions)
Required Minimum Distributions (RMDs) are required after age 73 -- aka you HAVE to withdrawal a certain amount after 73

Roth

Simply: Money goes in after taxes are taken out, but can be withdrawn tax-free at retirement.

Cannot Claim a Tax Write-off on Tax Return
If you make too much money, you cant contribute
Has an annual limit on how much you can contribute
No RMDs, can grow well after 73
Contributions can be withdrawn tax & penalty-free, but appreciated capital will be subject to 10% penalty

Which one do I need?

Well, that can be a difficult decision because we must be able to forecast the future...and man, as a Meteorologist, I know this can be quite hard. What do I mean?

The forecasting we need to do is based on what we think our tax bracket will be when we are in retirement.

Will I be in a Higher Tax Bracket in Retirement than I am now? Yes? Then you want a Roth.

Will I be in a Lower Tax Bracket in Retirement than I am now? Yes? Then you want a Traditional.

What Ranks Need to Worry About, Which Type?

Disclaimer: This is not financial advice; please discuss with a tax professional. These are heavily assumed, averaged, and ballpark figures.

One of the large assumptions is based on your Marginal Tax Rate. The general advice is if you are under a 25% Marginal Tax Rate -- Roth. If you are in between 25-30%, then a mixture. If you are over 30%, then Traditional. The Marginal Tax Rate is also composed of multiple variables. I am going to go with the worst-case scenario here and assume a single member with zero kids (marriage and kiddos can give tax benefits).

Keep in mind that, for the TSP, it will open both a Traditional and a Roth for every account. Your match will go into the Traditional since it goes in pre-tax, and what you contribute should go into whatever, based on the tables below. If you need to contribute to both Traditional and Roth, and say you contribute 5% total to TSP, 2.5% will go to Traditional and 2.5% will go to Roth. You set up those allocations in myPay.

Officers

rank	Roth	traditional
O-1	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
O-2	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
O-3	Only Focus on Roth TSP/IRA up until Year 8	After Year 8, Contribute to both Traditional & Roth (50/50)
O-4	Only Focus on Roth TSP/IRA up until Year 3	After Year 3, Contribute to both Traditional & Roth (50/50)
O-5	Contribute to both Traditional & Roth (50/50)	Contribute to both Traditional & Roth (50/50)
O-6	Contribute to both Traditional & Roth (50/50) up until Year 26	Contribute to all Traditional after Year 26
O-7	Contribute to both Traditional & Roth (50/50) up until Year 16	Contribute to all Traditional after Year 16
O-8	Contribute to both Traditional & Roth (50/50) up until Year 4 (whoever the fuck that is)	Contribute to all Traditional after Year 4

I hope you have it all figured out past O-6; if not, please reach out, and we will work through it!

Prior Enlisted Officers

rank	Roth	traditional
O-1E	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
O-2E	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
O-3E	Only Focus on Roth TSP/IRA up until Year 6	After Year 6, Contribute to both Traditional & Roth (50/50)

Warrants

rank	Roth	traditional
W-1	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
W-2	Only Focus on Roth TSP/IRA up until Year 24	After 24 Years, Contribute to both Traditional & Roth (50/50)
W-3	Only Focus on Roth TSP/IRA up until Year 16	After Year 16, Contribute to both Traditional & Roth (50/50)
W-4	Only Focus on Roth TSP/IRA up until Year 12	After Year 12, Contribute to both Traditional & Roth (50/50)
W-5	Contribute to both Traditional & Roth (50/50)	Contribute to both Traditional & Roth (50/50)

Enlisted

rank	Roth	traditional
E-1	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-2	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-3	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-4	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-5	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-6	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-7	Only Focus on Contributing to Roth TSP/IRA	No Need for a Traditional at this Time
E-8	Only Focus on Roth TSP/IRA up until Year 26	After Year 26, Contribute to both Traditional & Roth (50/50)
E-9	Only Focus on Roth TSP/IRA up until Year 18	After Year 18, Contribute to both Traditional & Roth (50/50)

I hope this gives you some clarity on the direction that you need to go with your retirement accounts. Again, everyone's situation is different, so this information here is very generalized. If you feel you do not fit the situation outlined, please speak to a tax professional!

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