All Branch Topic (ABT) Find TSP using special pay or base pay?

[turkish]

I bet I could figure this out if I understood simple multiplication and division...but is there any advantage to funding your TSP all at once out of the annual VSP? Seems that gets taxed at a higher "bonus" rate.

Ack this is going away soon anyway, but just wondering. Thanks.

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[Cooperd0g]

No, there is no benefit to that. It may seem taxed at a higher rate, but it all get lumped into income on your tax return and balanced out among the tax brackets depending on where you fall.

However, I recommend you use the Roth TSP anyway. Your effective tax rate as a military physician is rather low so Roth is to your benefit. With Roth contributions you just set a dollar amount.

 

[turkish]

Can you roll over a traditional tsp to a Roth?

Just noticed a nice typo in the title of this thread. Awesome.

Nevermind- found some info on conversion. TSP Roth Conversion | CSRS & FERS Retirees

And the benefit of conversion depends on whether you anticipate having a higher income now or during retirement, since distributions from retirement accounts and military retirement are both taxable income.

 

[Ziehl-Neelsen]

As mentioned above, there is no benefit to funding the TSP in one fell swoop from a bonus or monthly from your normal paycheck. It all evens out in April. I'm personally a believer in dollar cost averaging, so I elect to have my contributions come out of my monthly pay.

As you discovered, you can't roll your TSP into a Roth IRA without paying taxes on the conversion with some unique exceptions. Jim chronicled a few of these exceptions here:
How To Get Your Tax-Exempt TSP Money In To A Roth IRA

Hopefully you've been backdoor Rothing along with your traditional TSP for a number of years. If not, you can still make a backdoor Roth contribution for 2016 as long as you do it before tax day. And as far as transferring traditional TSP money out, I wouldn't recommend it. The G fund is fantastic, and the low expense ratio on the C fund is beats any other large cap index fund. Gradually convert more of your TSP into the G fund as your other tax deferred equity index funds increase in value. Eventually your residual TSP can comprise your entire government fixed income allocation.

 

[Gastrapathy]

You also can transfer money into TSP in the future if you need to allocate more to the G Fund (as long as you keep any balance).

 

[pgg]

You also can transfer money into TSP in the future if you need to allocate more to the G Fund (as long as you keep any balance).

True -

The difficulty is that you're allowed exactly ONE lifetime partial-withdrawal from TSP, so rebalancing out of G is a little harder than rebalancing into G. (Unless rebalancing into the CSI funds meets your needs.)

The other problem with TSP is the weird Roth-traditional blendedness of it, and the inability to manage those portions of the portfolio independently. I hope that by the time that's important issue for me, they'll have modernized TSP a bit.

 

[SurgDoc95]

Can anyone ball park how much an O-4 in the army would make post residency as lets say a general surgeon? I've been looking all over the place and can't seem to find physician pay specifics.

 

[Ziehl-Neelsen]

~150 large.

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file:///C:/Users/m156512/Downloads/2017MilitaryPayChart%20(1).pdf