TSP and Vanguard Roth

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Topic Author
Blue14
Posts: 3
Joined: Sun Jul 02, 2017 6:20 pm

TSP and Vanguard Roth

Post by Blue14 »

Hi everyone,

I am fairly new to this whole investing thing but I am trying to put as much money into retirement accounts as I can. Currently, I'm eligible for a TSP but I have not set one up yet. I do however have an Vanguard Roth and a Vanguard Total Stock Market Index Fund Admiral Shares account. Should I open up a TSP to maximize my contributions to retirement accounts? If so, which fund should I select and what is the max that I can contributed on top of the maxed out Vanguard Roth (so I don't get tax penalties)?

Thanks for the advice!
tigermilk
Posts: 645
Joined: Thu Aug 15, 2013 9:32 am

Re: TSP and Vanguard Roth

Post by tigermilk »

You should contribute to at least the agency matching and you can contribute up to $18k/year in the TSP (unless you are turning 50 this year in which case it's more). You can contribute that Max as well as max your Roth at Vanguard. Depending on your tax bracket you may want the Roth TSP (don't confuse the TSP and Vanguard Roths). For the funds, that depends on your own timeline, risk, etc.
dharrythomas
Posts: 1106
Joined: Tue Jun 19, 2007 4:46 pm

Re: TSP and Vanguard Roth

Post by dharrythomas »

Unless you are in the military and are ineligible for the match, you should set up TSP contributions IMMEDIATELY. By immediately, I mean tonight or tomorrow. The TSP matches the first 5% of your salary that you contribute. You should do this right away so as not to miss another pay period.

The minimum you should contribute is 5% of your salary to get the complete match (free money). After that if you have more that you can dedicate to retirement, either higher TSP contributions or either a Roth or Traditional IRA are done depending on your preferences and AGI.

Good luck.
dharrythomas
Posts: 1106
Joined: Tue Jun 19, 2007 4:46 pm

Re: TSP and Vanguard Roth

Post by dharrythomas »

Sorry I missed these two questions.

The max you can contribute to the TSP is $18K.

If you're unsure what you want to invest in, the LifeCycle funds are a good start.

Good luck
fundseeker
Posts: 910
Joined: Mon Dec 24, 2007 9:02 am

Re: TSP and Vanguard Roth

Post by fundseeker »

I see this is your first post. You will get much better advice by posting much more about your entire financial situation. But regardless, you need to consider the TSP and make sure you're not missing out on free money and a tax break.
Topic Author
Blue14
Posts: 3
Joined: Sun Jul 02, 2017 6:20 pm

Re: TSP and Vanguard Roth

Post by Blue14 »

Thanks!
Last edited by Blue14 on Sun Jul 02, 2017 10:40 pm, edited 1 time in total.
Topic Author
Blue14
Posts: 3
Joined: Sun Jul 02, 2017 6:20 pm

Re: TSP and Vanguard Roth

Post by Blue14 »

I'm military (28 yrs old) so am ineligible for matching unless I change to the new retirement plan (still trying to figure that out too). So are you saying that I can max the Vanguard and still max a roth TSP? Is the $5,500 max across all roth retirement accounts? Lastly, does the Vanguard roth count against the 18k max contributions?

For example, can I contribute $5,500 in a roth TSP, $5,500 in the Vanguard account and $12,500 in a traditional TSP? I'm still relatively young so I'm wiling to accept higher risk. Also, I want to max my retirement account contributions because, if I decide to go back to school, retirement accounts don't count against FAFSA eligibility.

Thanks!
PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: TSP and Vanguard Roth

Post by PFInterest »

Blue14 wrote:I'm military (28 yrs old) so am ineligible for matching unless I change to the new retirement plan (still trying to figure that out too). So are you saying that I can max the Vanguard and still max a roth TSP? Is the $5,500 max across all roth retirement accounts? Lastly, does the Vanguard roth count against the 18k max contributions?

For example, can I contribute $5,500 in a roth TSP, $5,500 in the Vanguard account and $12,500 in a traditional TSP? I'm still relatively young so I'm wiling to accept higher risk. Also, I want to max my retirement account contributions because, if I decide to go back to school, retirement accounts don't count against FAFSA eligibility.

Thanks!
They are separate accounts. You can do 18K TSP and 5500 IRA.
LAguy818
Posts: 41
Joined: Sat Feb 21, 2015 2:57 am

Re: TSP and Vanguard Roth

Post by LAguy818 »

Hi Blue14,

Former military here, normally you can contribute up to $18K in either Traditional or Roth TSP and additionally can contribute $5500 in either a Traditional or Roth IRA.

If you are on a deployment, your max contribution to the TSP rises to $54K in addition to the $5500 you can put into an IRA.

edit: Plus if you are on deployment make sure to contribute the max $10K to the Savings Deposit Program, a 10% interest rate savings account that you can only contribute through your unit's finance office.
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