Roth vs. Traditional TSP Decision Tool

The core decision: your tax rate now vs. later

The Roth vs. Traditional question reduces to a single comparison: will your marginal tax rate in retirement be lower, higher, or the same as it is today? Traditional defers the tax; Roth pays it now. If you pay a lower rate later, Traditional wins. If you pay a higher rate later, Roth wins. If the same, they produce identical after-tax wealth.

How the math works

This calculator holds the after-tax cost today constant — the only fair comparison. If you can afford $10,000 of after-tax spending on TSP, Roth puts all $10,000 in the account. Traditional puts $10,000/(1-current rate) in pre-tax — more dollars up front, but taxed on the way out. The ratio of Traditional to Roth at retirement is simply (1-retirement rate)/(1-current rate). Traditional wins exactly when that ratio exceeds 1, which happens when retirement rate is below current rate.

When Roth wins / when Traditional wins

Federal employees often underestimate their retirement income. A FERS pension, Social Security at 62, and TSP withdrawals can combine to produce a taxable income similar to — or higher than — your working income. In that scenario, a Roth today locks in a lower rate. Conversely, if you are at peak earnings in a 32% or 35% bracket and expect a much lower income in retirement, Traditional is likely better.

The 2026 high-earner Roth catch-up rule

Starting in 2026, employees age 50 or older whose prior-year wages (as reported on a W-2) exceeded $150,000 must direct all catch-up contributions to Roth TSP. This is a SECURE 2.0 requirement and applies regardless of which account type is better for your tax situation. Higher-income federal employees in their 50s who previously sent catch-up dollars to Traditional TSP will need to update their TSP contribution elections.