Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is the difference between a Roth TSA and a Roth IRA?

April 26, 2017Roth roth ira tsa

0

Posted

What is the difference between a Roth TSA and a Roth IRA?

1 Answer

0

Posted

Roth TSA contributions are after-tax, which means you pay taxes on your contributions now, but all qualified* withdrawals, including earnings, are tax-free. The Roth IRA is an additional after-tax savings option. Participants may want to contribute to a Roth IRA if they are maximizing their TSA contributions or if they are concerned about the ability to access their contributions before retirement. However, not everyone is eligible for the Roth IRA. To contribute, your income must not exceed $120,000 (single) or $176,000 (married, filing jointly). Also worth noting is the difference between contribution limits for the Roth TSA and Roth IRA. Contribution limits are substantially lower in the Roth IRA. In 2009, for participants under age 50, a Roth IRA allows contributions only up to $5,000 annually, compared to $16,500 for the Roth TSA. *For qualified withdrawals from a Roth TSA, the participant must be age 591/2 or older and have had the Roth TSA account for at least five years.