Roth TSP. With Roth TSP, your contributions go into the TSP after tax withholding. That means you pay taxes on your contributions at your current income tax rate. The advantage of the Roth TSP is that you won't pay taxes later when you withdraw your contributions and any qualified earnings.

Is Roth TSP better than traditional?

For most, the Roth TSP is the better choice because currently, you're in a lower tax bracket than you'll be in the future. With a Roth, your earnings and withdraws are tax-free because you contribute after-tax money, meaning you pay taxes upfront. ... In the Traditional TSP, the money you contribute is pre-tax.

Is Roth TSP a good idea?

If you expect to have a higher income later in your career, or in retirement, then a Roth TSP is a great fit. Even if you expect to be in the same tax bracket in retirement, the Roth TSP can be a good fit. ... Regardless of what happens to future tax rates, you know that you won't pay income taxes on your Roth earnings.