Introduction


The Contribution Comparison Calculator helps you assess how the tax treatment choice you make for your employee contributions affects your paycheck. With Roth TSP contributions, you make contributions with after-tax income by paying taxes up front. During retirement, you receive qualified Roth distributions tax-free. The traditional TSP lets you make contributions before taxes are taken out of your income and then pay taxes on withdrawals.

The Contribution Comparison Calculator provides a side-by-side comparison of traditional and Roth contributions to help you assess whether Roth TSP might be right for you. Keep in mind you may choose to contribute all, some, or none of your contributions to the Roth TSP. If contributing to both Roth and traditional balances within your TSP account, your combined contributions cannot exceed the elective deferral limit.

Note that the calculator results are based on the limited information captured. You should consult a qualified tax or financial advisor to further assess your individual situation.

Your Retirement Profile


If you plan to retire before age 59½, be aware that any Roth earnings included in a withdrawal will not be tax-free.  Also, you may be subject to a 10% early withdrawal penalty tax.  See the TSP tax notice “Important Information About Payments From Your TSP Account” for more information as well as exceptions to this rule.
years A recommended estimation is age 95 minus your retirement age to plan for your income needs and protect your longevity risk
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% Checking this box reduces the contribution percentage to the Roth balance, so that after paying taxes, your paycheck will be the same as it would be after a contribution to your traditional TSP balance. If you do not check this box, the same contribution percentage will be used for Roth and traditional contributions.

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Your Results


Traditional Roth
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Contribution percentage:
Contribution amount:  per check
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You have chosen to keep the impact on your paycheck equal; therefore, your Roth TSP contribution percentage and contribution amount will be lower than a traditional TSP contribution. The downward adjustment to the Roth contribution is necessary to account for the income taxes that you pay up front instead of in the future.

Additionally, Roth TSP contributions will not reduce your adjusted gross income (AGI) the way that traditional contributions will. A higher AGI means you may lose out on certain tax advantages.


Legend for chart: Traditional TSP on the left, Roth TSP on the right

You have chosen to keep the impact on your paycheck equal; therefore, your gross (pre-tax) traditional balance will be higher because the higher contribution percentage allows you to put aside a higher dollar amount and potentially receive a greater return through earnings.

The higher traditional balance may be offset, however, by any income tax you pay on it when you make a withdrawal. The Roth TSP balance, on the other hand, will be tax-free in retirement (provided you meet IRS requirements) because you paid the taxes on those contributions when you made them during your career.

Predicting your tax bracket in retirement is the key to determining if Roth TSP or traditional TSP contributions are the right choice for you now.


Legend for chart: Traditional TSP on the left, Roth TSP on the right

This net (after-tax) annual income comparison provides a more accurate reflection of whether you might be better off paying taxes up front (Roth TSP) or when you withdraw your money (traditional TSP).

It all comes down to what tax bracket you are in now and which one you think you may fall in while in retirement. Therefore, you may wish to consult a tax advisor to assist you with your retirement planning and contribution decisions.

Traditional Roth
Paycheck impact:  per check
 per year
 per check
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Contribution percentage:
Contribution amount:  per check
 per year
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You have not checked the option to minimize the impact Roth contributions have on your paycheck. Therefore, the impact (deduction) on your paycheck will be greater when making Roth TSP contributions because your take-home pay will be reduced by both the contribution and the taxes on your contribution.

Additionally, Roth TSP contributions will not reduce your adjusted gross income (AGI) the way that traditional contributions will. A higher AGI means you may lose out on certain tax advantages.


Legend for chart: Traditional TSP on the left, Roth TSP on the right

You have chosen the same contribution percentage for Roth and traditional contributions; therefore, the Roth and traditional retirement balances will be the same. Keep in mind that your traditional TSP balance will be subject to income tax when you withdraw it, but withdrawals from your Roth balance will be tax-free provided you meet the IRS requirements.

The benefit of having a tax-free Roth TSP balance in retirement, however, must be weighed against the rate at which those contributions were taxed during your working years and any tax benefits you may have lost out on due to your higher AGI.

Predicting your tax bracket in retirement is the key to determining if Roth TSP or traditional TSP contributions are the right choice for you now.


Legend for chart: Traditional TSP on the left, Roth TSP on the right

This net (after-tax) annual income comparison provides a more accurate reflection of whether you might benefit from paying taxes up front (Roth TSP) or when you withdraw your money (traditional TSP).

Keep in mind that while a Roth TSP annual income stream may be higher when you withdraw your money, the benefit must be weighed against the rate at which those contributions were taxed during your working years and any tax benefits you may have lost out on due to your higher AGI.

It all comes down to what tax bracket you are in now and which one you think you may fall in while in retirement. Therefore, you may wish to consult a tax advisor to assist you with your retirement planning and contribution decisions.

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Any tax-exempt or Roth contributions included in a withdrawal are not subject to Federal income tax. However, Roth earnings are only tax-free if

  • 5 years have passed since January 1 of the calendar year in which you made your first Roth contribution, and
  • you are age 59½ or older, disabled, or deceased.