01/30/2026
Roth TSP conversions are now available — what federal employees should know
This is a meaningful update for federal employees and retirees doing long-term tax planning.
👉 Effective January 28, 2026, the Thrift Savings Plan (TSP) allows in-plan Roth conversions.
That means participants can convert Traditional TSP balances to Roth inside the plan, without rolling funds out to an IRA first.
Why this matters:
• More flexibility in managing future tax exposure
• Potential reduction of long-term RMD pressure
• Better coordination with pensions and Social Security
• Roth strategy while staying within the TSP
What often gets overlooked is that a Roth conversion isn’t just a retirement decision — it’s also a tax-year event.
Even with in-plan conversions now available, the analysis still matters:
• Where the conversion lands on your current-year return
• How it interacts with other income and deductions
• IRMAA thresholds and timing
• State tax impact
• Whether conversions should be staged over multiple years
The mechanics are straightforward.
The consequences show up on the same tax return you’re already filing — and can carry forward if not planned carefully.
If this is on your radar and you want to sanity-check the tax impact before acting, you can start here:
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