TSP to allow in-plan Roth conversions in 2026

[oncorhynchus]

FEDweek and Federal News Network are reporting that at the Nov 2024 FRTIB meeting it was announced the TSP will allow in-plan Roth conversions starting in Jan 2026.

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[vasaver]

Thanks for the update!

Any chance the TSP will allow Roth funds to be invested differently than PreTax? It would be great if Roth can be 100% C/S/I and Pretax can hold F/G funds.

[DiploInvestor]

[Moved into a new thread from: Roth Conversion for TSP --admin LadyGeek]

Reviving this topic in light of the upcoming changes (in Jan 2026) to allow in-plan Roth conversions for TSP:

https://federalnewsnetwork.com/tsp/2024 ... h%20assets.

[SurferLife]

Reviving this topic in light of the upcoming changes (in Jan 2026) to allow in-plan Roth conversions for TSP:

https://federalnewsnetwork.com/tsp/2024 ... h%20assets.

Wow, that's great news!

[rkhusky]

But you have to keep the Roth and Traditional in the same things.

[Weathering]

Would there be an age requirement on this (e.g., 59 1/2) ?
Hopefully not but wanted to ask.

[Alan S.]

Would there be an age requirement on this (e.g., 59 1/2) ?
Hopefully not but wanted to ask.

There is no reason for an age limit because IRRs (in plan Roth rollovers) are allowed for balances that are otherwise non distributable.

However, since the TSP does not allow non Roth after tax contributions, there is no mega back door opportunity here. You will be taxed on every dollar rolled into the Roth TSP.

And it only took the TSP 13 years to adopt IRRs at all.

[mouth]

But you have to keep the Roth and Traditional in the same things.

Baby steps!!!

But yeah I hear ya.

[rkhusky]

But you have to keep the Roth and Traditional in the same things.

Baby steps!!!

But yeah I hear ya.

I just move a tranche to Vanguard every 3-5 years. Roth conversions are so much easier there and the options are significantly greater.

[SquawkIdent]

[MichDad]

viewtopic.php?p=8126331#p8126331

MIchDad

[mouth]

I just move a tranche to Vanguard every 3-5 years. Roth conversions are so much easier there and the options are significantly greater.

Doing anything away from the TSP is easier…way easier. Cheaper expenses, less hassles in general dealing with your account, etc.

While the G Fund is great in certain interest rate environments, the last 2 years it’s been a dog. Much higher interest rates found elsewhere and leaving funds in the G have cost you. Depending on your G/safe funds amount, it could be in the 5 figures. I’ll never understand why people are accepting of that. It’s pretty clear cut.

Practical: For anyone with really enough money to really matter, they've likely had another option. If the G-fund is less than short treasuries (like it has been) Put the TSP all into C+S and move an equivalent amount out of Total Stock Market and into Treasury MMF fund. Then revert once the yield curve inverts.

Editorial: There are plenty of reasons some people dislike the TSP, but to throw shade at the G-fund for 2 years of a very weirdly inverted yield curve is hardly a fair critique. The "certain interest rate environment" where the G-fund shines is called every normal environment vs this inverted one. For a true buy-and-hold saver, the G-fund is hardly something to "accept".

[SquawkIdent]

[mouth]

Practical: For anyone with really enough money to really matter, they've likely had another option. If the G-fund is less than short treasuries (like it has been) Put the TSP all into C+S and move an equivalent amount out of Total Stock Market and into Treasury MMF fund. Then revert once the yield curve inverts.

Editorial: There are plenty of reasons some people dislike the TSP, but to throw shade at the G-fund for 2 years of a very weirdly inverted yield curve is hardly a fair critique. The "certain interest rate environment" where the G-fund shines is called every normal environment vs this inverted one. For a true buy-and-hold saver, the G-fund is hardly something to "accept".

So for the last 2 years we’ve been in an inverted yield curve. Why would I stick to the G fund during that?

When we are in a “normal” rate environment, I’ll be back in the G Fund. Until then, if the investor acted accordingly a few months ago you’ve locked in 5.2% yield until mid next year through T Bills. When the G Funds yield beats that, I’ll move back.

You wouldn't. Nor have I. I've been 100% C+S in my TSP and have had the equivalent value (which is the entirety of my fixed income allocation) in VMRXX in my 401k. I'm a bit confused by your post as that's exactly what I discussed in the post you replied to . The only difference is I went with VMRXX instead of locking in T-Bills because I don't like reinvestment risk and when they were at 5.2% no one knew for sure which way things were going; just like we don't know that now. As soon as G-fund is lower than VMRXX I'll swap back. Extra bonus now my TSP is even bigger so I'll be able to hold more G-Fund to accommodate my asset allocation.