Will Future You Be Mad You Skipped Roth TSP?

Most TSP problems are obvious. But tax problems are different.

They usually look harmless for decades… and then one day your tax return in your 60s or 70s starts telling on you.

Roth vs Traditional in the TSP is one of those quiet decisions.

Same funds. Same market. Same TSP website.

Totally different tax story.

To make this concrete, let’s look at three fictional savers who all did something reasonable… and still ended up in the Roth TSP Regret club.

Story #1: The GS-7 Who Treated Every Dollar Like “Peak Earnings”

Naomi – age 26, GS-7, FERS

• Salary: $47,000

• Contributes 10% to TSP

• Chooses: Traditional only

Naomi’s logic is simple:

She’s right about one piece… she is doing the grown-up thing by saving 10%.

But look at her situation:

• She’s in the early, lower-pay part of her career.

• She expects promotions and higher steps.

• She has 30+ years for money to grow.

Fast-forward. Naomi hits her early 60s with:

• A FERS pension

• Social Security

• A big Traditional TSP balance

On the surface, this is success. But under the hood:

• Every dollar from Federal pension = taxable

• Most of Social Security = taxable for many federal retirees

• Every dollar out of Traditional TSP = taxable

Later on, once Required Minimum Distributions kick in, the IRS stops asking politely and starts forcing withdrawals from that Traditional balance whether she needs the cash or not.

Naomi did the right thing (she saved early).

Her regret is how she labeled those dollars.

If she had steered even half of her 20s contributions into Roth TSP instead:

• Future Naomi would have a meaningful tax-free pool to draw from.

• Forced withdrawals from Traditional would likely be smaller.

• She’d have more control over which bucket to tap in high-tax vs low-tax years.

Naomi’s mistake?

She treated early-career, low-bracket income like it was peak-bracket income and gave up cheap Roth space when it was most available.

Story #2: The Dual-Fed Couple Who Fell in Love With “Tax-Free” at the Worst Time

Chris (GS-14) & Lila (GS-15) – both FERS, mid-50s

• Combined income: high, comfortably in upper brackets

• Both maxing TSP contributions

• Proudly moved everything to Roth TSP after a retirement seminar

Their mental model:

Again, not crazy. But zoom out.

Right now:

• They’re in some of the highest income years they’ll ever see.

• Every extra Roth dollar is being taxed at that top marginal rate.

In their 60s, there’s a decent chance they’ll have a window where:

• They’ve left federal service.

• Haven’t yet turned on both Social Security checks.

• Aren’t subject to RMDs.

• And their taxable income is much lower.

That gap could have been used to take withdrawals from Traditional at lower tax rates…

Or convert slices of Traditional to Roth strategically over several years.

Instead, they pre-paid tax at the very top of their income ladder.

They still get the benefit of tax-free Roth income later.

But the price tag might have been unnecessarily high.

A more balanced version of their plan might have looked like:

• Heavy Traditional contributions during max-pay years to shrink today’s tax bill.

• A deliberate conversion strategy in early retirement, when they can “fill” lower tax brackets more cheaply.

Chris & Lila’s mistake?

They didn’t ask, “Is this the cheapest time to do Roth?” They only asked, “Does tax-free later sound good?”

Story #3: The BRS Soldier Who Left a “Never Taxed” Opportunity On the Table

Staff Sergeant Ortiz – BRS, active duty

• Covered by the Blended Retirement System

• Gets the automatic 1% TSP + up to 4% matching

• Deployed multiple times to a combat zone

During deployment, a big chunk of Ortiz’s pay is tax-exempt.

But the same time, he can still contribute to TSP and he can choose Traditional or Roth for his own contributions.

Here’s the part almost no one explains clearly to him:

• If he sends tax-exempt pay into Traditional TSP, the contribution is tax-free going in, but the growth is taxable when he pulls it out in retirement.

• If he sends tax-exempt pay into Roth TSP, he pays no tax now (income is already tax-free)… and qualified Roth withdrawals later are tax-free too.

In other words, a deployment is one of the rare times in a career when you can realistically build money that is:

But Ortiz doesn’t know that. Instead, he:

• Leaves contributions on autopilot.

• Keeps his deferral rate low because money feels tight.

• And doesn’t bump his Roth percentage while he’s in the tax-exempt zone.

The match still helps. TSP still grows.

But the once-in-a-career chance to supercharge a Roth bucket using tax-free income passes quietly.

Ortiz’s regret?

He didn’t just “fail to save more.” He missed out on one of the most powerful tax deals a BRS service member ever gets.

What All Three Have in Common

Different ages, different jobs, different uniforms — but the same pattern shows up:

• Naomi: paid later at a tax rate that may be higher than it needed to be.

• Chris & Lila: paid now at a tax rate that may be higher than it needed to be.

• Ortiz: had the chance to never pay and only got half the benefit.

None of them picked bad TSP funds.

None of them stopped contributing.

Their problem was timing…

That is, wrong bucket at the wrong moment in their career.

A Quick Roth vs Traditional Gut Check

You don’t have to build a full tax projection to get oriented.

Start with a simple “Which of these sounds more like me?” exercise.

You’re probably a good candidate for more Roth if:

• You’re early in your career (GS-5 to GS-11, junior officer/enlisted) and expect bigger paychecks down the road.

• Your current taxable income is modest, and you’re not brushing up against high brackets.

• You’ve got 15+ years until you plan to retire.

• You’re under BRS and have (or expect) tax-exempt deployment pay — especially if you can safely raise your contribution rate during those months.

• You like the idea of having a tax-free pool in retirement you can tap without bumping yourself into a higher bracket.

You may lean toward more Traditional if:

• You’re in your prime earning years (think late-career GS-13 and above, or a high-income dual-fed household).

• You expect a period in your 60s where your income will dip before RMDs and full Social Security kick in.

• The current-year tax deduction from Traditional contributions helps you:

  • Stay in a lower bracket.

  • Free up cash for other goals (debt payoff, college, building a cash buffer).

• You’re open to the idea of doing Roth conversions later, in years when you can deliberately choose how much income to recognize.

And if you’re not sure?

You don’t have to choose a single team.

Plenty of FWR readers will be well-served by a split approach, for example:

• 50–70% of new contributions to Traditional

• 30–50% of new contributions to Roth

Then tilt that mix over time as your income and retirement timeline become clearer.

The goal isn’t to guess the one perfect answer.

It’s to avoid waking up at 65 with everything trapped in one tax bucket that doesn’t match your reality.

You don’t have to rewrite your entire tax future today.

But you can decide that, from this point forward, you’re not going to join the Roth TSP Regret Club by accident.

Best,
—FWR