So I've been lurking for about a week now and have found this forum extremely useful in educating me on all the stupid stuff I have done in the past. For example, most recently in 2012 I missed the full Child Tax Credit by $43 in income due to poor (no) planning (cost me $50 in tax savings). And so far that is the biggest take away for me. I need to do some planning for 2013 and beyond.
What I have rationalized for myself is:
1) Contribute to my tax deferred TSP enough to ensure I am below the $110K Child Tax Credit phase out.
2) Current Tax Rate of 25% + State Inc Tax. Since I have a Federal DB pension, it is not likely in retirement I'll be able to get below 25% at that point.
3) Wife is currently a stay at home mom, but will go back to work in about two years. At that point I can see us jumping to the 28% bracket.
Conclusion: Only put enough Tax Deferred into TSP to ensure I maximize the Child Tax Credit. The rest of the contribution to my Roth TSP and her Roth IRA. Then re-evaluate the plan when she goes back to work. Likely increase Tax Deferred at that point to attempt to stay in the 25% bracket.
I welcome any advise or thoughts on my plan. Next step will be to employ the investment strategies for asset allocations.