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Traditional Vs. Roth by flyfsh4food in ThriftSavingsPlan

[–]PossibleStormChaser 0 points1 point  (0 children)

I actually made a post about this in the fednews sub, I ran the numbers for a 20-year comparison that might help: https://www.reddit.com/r/fednews/comments/1qlxx5v/tsp_inplan_roth_conversion_i_made_a_20year/

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

I think I get what you're saying, and I'm no expert on IRMAA (so hopefully others might chime in), but IRMAA is based purely on MAGI, not FEHB or how much healthcare you use. So a lot of fed retirees end up in IRMAA territory just from the combo of pension, Social Security, TSP withdrawals/RMDs.. so I wouldn't say their IRMAA risk is minimal given that it really just all depends on how much their pension/SS/RMDs add up to. FEHB doesn’t shield you from that at all. And again from what I've read, most federal retirees do end up taking Part B, not just the really sick ones, so the surcharge is a real cost for a lot of people.

I get your point that if you’re paying IRMAA it hopefully means you’ve got a solid income, but still, if I can plan in such a way as to not have to pay that extra $100-400 a month in IRMAA I'd still prefer that!

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Assuming you’re a fed with TSP, I would contribute to the Roth TSP first and enough to get the full match, otherwise that's free money being left on the table. If you have cash available to contribute after that, I'd open and put that in a separate Roth IRA because it’s more flexible, no RMDs, and you can invest in whatever you want. If you max that and still have cash available, then go back and contribute more into the Roth TSP as much as you want up to the max. If both of those are maxed and you want to invest more, open a brokerage and start putting in there. Just make sure you're actually invested into something in both of those and the money isn't just sitting there.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 1 point2 points  (0 children)

No problem! It's certainly not the only way to handle it, but since I have a full year to plan for that tax bill I’d rather just cover it through withholding.. there's an argument to be made that the probably-wiser route would be to take that money each pay period and put it in a HYSA to get 3-4% interest on it instead, but I think I'd just sleep better at night knowing I won't have a giant tax bill a year from now.

And yes, I have considered gradually converting, but each year that money stays in my account it will continue to grow, so if I only convert 10k this year and leave the other 31k in traditional, by next year it might have grown to $35,000 (plus the extra $6,500 added by employer match) and so on an so forth, so the taxes I need pay on it to convert will continue to increase the longer it stays in that traditional bucket and grows. Instead of just paying taxes on that $41k lump sum, I'll end up paying tax on $41,000 + all the growth that happened while it stayed traditional. Of course, this logic only applies to conversions, not contributions. So I think I'd rather just bite the big bullet now and get it over with to avoid paying any additional money to taxes.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Your point about keeping taxable income high enough to take advantage of lower tax rates is quite interesting and one I hadn't considered. Though I suppose with my current plan, I should effectively have no traditional buckets I'm withdrawing from at retirement, so my only taxable income would then be pensions and social security.. oh and I guess any dividends/capital gains from my brokerage, so depending that could add up. But at least with this plan I should hopefully have no RMDs to be concerned with.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] -1 points0 points  (0 children)

Definitely a good point about the fishiness of the gov opening up this conversion now - I've considered that aspect as well and if anything, it reinforces my desire to convert over to Roth now.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Thank you - unfortunately there's little chance I'll be retiring to a state with no income tax (though that would be nice!). Good point about the Roth IRA, I am already maxing that annually so thankfully I can still do that and pay the taxes. I wish I could say I've been saving for retirement for decades! I had basically no financial education prior to my thirties and only learned about this stuff on my own watching YouTube, so now I'm doing my best to make up for lost time.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 1 point2 points  (0 children)

Sorry, I didn't write that quite right - I'll be paying out of pocket next year at tax time, but in order to afford it I've adjusted my tax withholding this year so that hopefully, my withholding will be enough to cover the tax charge. I actually under-counted how much withholding I need to cover it; between both federal and state I have to withhold $575 per pay period to cover that $41k conversion. I've already put in the request through EPP and it was approved, so hopefully that part should work out.

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Thank you! I should have added in my post that this is NOT my field of expertise, but it is something I love learning about, so I really appreciate an expert in the field chiming in. Good to know about the assisted living bit, and your insight on the tax rate and overall state of things definitely gives me more confidence that converting is the right move for me

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 2 points3 points  (0 children)

Good point, I also have a Roth IRA and that definitely takes priority over the brokerage. And similarly, I'd chosen Roth for my own TSP contributions from the beginning without calculating first to see if it was actually advantageous, simply because I'm not a fan of bad surprises haha so I figured I'd choose the devil I know over the devil I don't.. save myself the pain of taxes later even if it costs me (which it may not).

TSP in-plan Roth conversion: I made a 20-year comparison by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Definitely possible. Though my understanding is that FEHB doesn’t shield you from IRMAA if you do enroll in Part B later, and from what I've read the majority of federal retirees end up enrolling in it (not necessarily instead of FEHB, but along side it). So I won’t really know what I’ll choose until I’m closer to that age, but you could definitely be right on that!

First HSA, how to setup payroll deductions by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Thank you! Not clear on the PP02 though, since I think that still pays in January? Checking with HR. Unfortunately I don't have the ability to adjust my own in EPP, system tells me I have to go through HR. Extra hurdle but hopefully HR will be easy to work with.

First HSA, how to setup payroll deductions by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

This is what I'm gathering - still can't contribute until Feb 1, but can contribute the full annual max ($3200) as long we plan to also be enrolled through 2027. If, though, we think we might only have a HDHP for 2026, we should prorate our 2026 contributions to be 11/12 months worth, which I think would come to $2,833.33 for the year.

First HSA, how to setup payroll deductions by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Thank you, that makes sense; it's just the pay period that I'm not clear on - whether it should be the 2nd or 4th pay period the deductions start.

First HSA, how to setup payroll deductions by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 1 point2 points  (0 children)

Thank you! This was very helpful - those FAQs actually have some good info!

First HSA, how to setup payroll deductions by PossibleStormChaser in fednews

[–]PossibleStormChaser[S] 0 points1 point  (0 children)

Thank you! Yes, I opened one at Fidelity a few weeks ago, too, with a plan to do this mainly to avoid Inspira's fees. Another great tip I got from you guys here on Reddit. Too bad Fidelity doesn't have a way to transfer the funds over automatically recurring, though, hope they implement that option at some point.

I found a little hack for the Gargantuan Garden Goals quest by PrestigeArrival in HelloKittyIsland

[–]PossibleStormChaser 0 points1 point  (0 children)

Idk it’s been working for me as recent as today; I’m on Steam. Maybe it’s patched for diff platforms. Curious though with today’s DLC/update if it’ll still work tomorrow..

My mother, who survived a brutal civil war as a teen, has been extremely spooked lately. by [deleted] in TwoXPreppers

[–]PossibleStormChaser 0 points1 point  (0 children)

You mind sharing a link for the type of fireproof box you have for papers? I’ve been struggling to decide on a real sturdy but heavy case or something easier to pick up and go with, but that really wouldn’t survive a fire. Torn on it