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Correction: The previous version of this email stated the wrong 2026 IRA contribution limit for those age 50 and older. The 2026 IRA contribution limit if you’re age 50 or older is $8,600. |
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Thanks for following along with our emails about traditional and Roth TSP! We’ve received great questions and feedback—please keep them coming. We’ll send a follow-up email soon to answer questions and add clarity, especially around these changes coming to Roth TSP in January:
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Roth TSP and Roth IRA: What’s the difference?
This email in the traditional TSP and Roth TSP series clears up a common point of confusion: the difference between “Roth TSP” and a “Roth IRA.” Both let you save after-tax money for retirement, and while they share some features, they have very important differences.
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Roth TSP is completely separate from a Roth IRA
The first important difference (and most common confusion) is in the name:
- “Roth TSP” is the Roth balance you can have inside your TSP account.
- A “Roth IRA” is an “individual retirement account” that you can open outside the TSP at a provider you choose.
It’s more than just jargon—there’s no such thing as a “Roth IRA in the TSP.” Roth TSP and a Roth IRA are two separate types of accounts. They’re defined in different parts of the tax code and follow different rules for money going in and money coming out. If you’re looking for information about your Roth TSP balance and accidentally call it a Roth IRA, you might end up with the wrong guidance.
The good news? Because Roth TSP and a Roth IRA are separate, you can contribute to either or both. Just make sure that whatever option you choose fits your financial situation and goals, and consider speaking to a tax advisor if you need help deciding.
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What’s the same about Roth TSP and a Roth IRA?
The reason it’s easy to mix up Roth TSP and Roth IRAs is that they do share a lot of features:
- Both contain Roth (after-tax) money, which means you pay income tax before your money goes in.
- Both offer tax-free withdrawals of contributions, and the earnings from investment growth can also be withdrawn tax-free if they meet IRS requirements for being “qualified,” as described in the next bullet.
- The same IRS requirements for “qualified” earnings apply to both. For Roth earnings to be withdrawn tax-free, they must meet BOTH these conditions:
- It’s been at least 5 years since January 1 of the year you made your first Roth contribution.
- You’re age 59½ or older, permanently disabled, or deceased.*
- Neither requires you to take mandatory minimum distributions during your lifetime. (Distribution rules for beneficiaries are different.)
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What’s different about Roth TSP and a Roth IRA?
It’s important to know the differences between Roth TSP and a Roth IRA before you make financial decisions:
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Roth TSP
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Roth IRA
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Your Roth TSP contributions can only come from your paycheck while you’re employed in a TSP-eligible position.
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You can make contributions from any earned income.
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The contribution limits are higher for your TSP account. For example, the 2026 elective deferral limit is $24,500, which applies to the combined total of your Roth and traditional employee contributions. If you’re age 50 or older, you can contribute more through catch-up contributions.
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The IRA contribution limits are lower. For example, the 2026 IRA limit is $7,500 ($8,600 if you’re age 50 or older).
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There are no income limits for Roth TSP.
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Your Roth IRA contribution might be limited based on your filing status and income.
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Roth TSP contributions can be matched up to 5% of pay for FERS and BRS members. (Matching contributions go into your traditional (pre-tax) balance, even if you designate your own contributions as Roth.)
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There are no matching contributions for a Roth IRA.
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You invest your Roth TSP balance according to the TSP investment options you choose for your TSP account. (You cannot choose separate investments for your traditional and Roth TSP balances.)
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Your Roth IRA investment options depend on what your Roth IRA provider offers.
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Roth TSP can be rolled over to a Roth IRA.
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A Roth IRA cannot be rolled over to the TSP. (But Roth money from other eligible employer plans can be rolled over to the TSP.)
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The 5-year period for “qualified earnings” begins on January 1 of the year you make your first Roth contribution to your Roth TSP balance. Contributions to Roth IRAs or other Roth accounts outside the TSP do not affect this timing. However, if you roll over Roth money from another eligible employer plan to the TSP, the start date for your entire Roth TSP balance will be the earlier start date, either from the incoming Roth balance or your existing Roth TSP balance.
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The 5-year period for “qualified earnings” begins on January 1 of the year you make your first contribution to any Roth IRA you own, and it applies to all your Roth IRAs. The start date of your Roth TSP balance does not affect this timing, even if you roll over money from your Roth TSP to a Roth IRA.
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When you take money from your Roth TSP balance, the distribution will include both contributions and investment earnings on those contributions in amounts that are proportional to the amounts in your Roth balance. You won’t owe taxes on the contributions portion, but if your account doesn’t meet both requirements mentioned earlier for “qualified” earnings, you’ll owe taxes on the earnings portion.
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When you take money from a Roth IRA, the distribution amount pulls first from your total contributions. The ordering rules for distributions from a Roth IRA can be complex.
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What you can do with this information
Spread the word! Many TSP participants tell us they often turn to coworkers, supervisors, friends, or family for help with TSP info. You can help others by pointing them to official TSP resources. We can’t give financial advice, but we do want to make sure participants base their decisions on rules that apply to the TSP and not on info meant for other retirement accounts.
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* We cannot certify to the IRS that you meet the definition of disability when your taxes are reported. You must provide the justification to the IRS when you file your taxes. “Deceased” means that Roth earnings inherited after your death automatically meet this condition—your Roth account must still meet the 5-year condition for earnings to be considered “qualified” and tax-free for beneficiaries. If you started a Roth balance by doing a Roth in-plan conversion, then that conversion is your first Roth contribution.
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As part of a series of emails about Roth TSP and traditional TSP, and changes coming that may affect your choices, you'll receive several emails through January 2026. You can unsubscribe at any time.
Contact us
Privacy
tsp.gov
ThriftLine Service Center
C/O Broadridge Processing
P.O. Box 1600
Newark, NJ 07101-1600
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