As a federal employee firmly within the 25% tax bracket, I haven't bothered with the new Roth TSP option since it didn't seem to be worthwhile. However, next May I'll be getting married, and my lovely bride-to-be will be a med student with no income for all of 2014. As I figure it, filing as married filing jointly will put the top dollars of my taxable income within the 15% bracket, making the Roth TSP much more attractive. Can you tell me if I'm doing this math correctly?
(Tax deductions are based on 2013 rates, so they'll probably all be a little higher for 2014, as might the bracket line between 15% and 25%.)
2014 expected income = $90,064 (or less if we have a lot of furlough days)
- $12,200 standard deduction for a married couple
- $7,800 personal exemptions
- $2500 HSA contribution
= $67,564 taxable income
Under $72,501, money is taxed at 15% for a married couple. Also, our joint income is probably going to be higher in retirement (I expect to have a pension in addition to TSP and Roth savings, she'll be working as a doctor for years after I retire). Given those factors, it seems to me that my best move is to put all of my TSP money for 2014 into a Roth TSP. Do you agree? I'm also maxing out both a Roth IRA and HSA.