Can I contribute to both a Roth IRA and a Roth TSP? You should always consult a qualified financial advisor to indicate the best course of action for your personal situation and always ensure that you understand an investment before investing money in it. The right financial planner can guide you through these important decisions as you save and invest for your future. For example, if you are looking to invest in gold, you may want to consider putting some of your funds into a Gold IRA. This way, you can diversify your portfolio and benefit from the potential of Gold in my IRA.
Sign up for our free email list to get our news updates in your inbox. Second, when you invest in the TSP, you receive equivalent contributions from your agency. There are no equivalent contributions for a Roth IRA. For example, if 80% of your account is in your traditional balance and 20% is in your Roth balance and you apply for a TSP loan, 80% of the amount you borrow or transfer to another investment fund will come from your traditional balance and 20% will come from your Roth account. In fact, if you make contributions to a traditional TSP, your modified adjusted gross income will be reduced based on the amount of the contribution, which could be the difference between being able to contribute to a Roth IRA and losing the opportunity.
If you've gotten this far in the article, you've probably already realized that neither the Roth TSP nor the Roth IRA are inherently better than the other. However, if you participate in a TSP, you can't deduct your traditional IRA contribution if your modified adjusted gross income is too high. Every dollar you contribute to a Roth TSP decreases the amount you can contribute to a traditional TSP, but not to a Roth IRA or a traditional IRA. And one of the best parts is that not only can you access what you deposit tax-free, but you can also get all the money you earned with your contributions while you were in the tax-free account.