Am I Allowed to Contribute to Both a Roth IRA and the Roth TSP?

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By on April 24, 2019 in Q&A, Retirement with 0 Comments

Two $100 bills with labels on top of them that read 'IRA', 'Roth', 'Retirement' and '401k' depicting a comprehensive savings plan for retirement

Q: My wife and I currently max out our Roth IRAs outside of my TSP [Thrift Savings Plan]. I understand that I can also contribute up to $19,000 towards my TSP. I just found out that I can/could designate that as a Roth option as well to save on taxes.

Can I do both a Roth IRA outside of my TSP for $6,000 and inside my TSP for $13,000 for a total of $19,000?

A: You can contribute to both a Roth IRA and the TSP, but the total amount you can save in both you have proposed is wrong; you can actually contribute more than what you are asking.

The 2019 contribution limits as outlined by the IRS state that you can contribute a maximum of $6,000 to a Roth IRA and a maximum of $19,000 to the TSP for a total of $25,000. If you can manage to contribute that maximum amount, you should do so because it will lead you to wealth in retirement while saving you a bundle on taxes by both being inside of Roths.

There are, however, annual income limitations on the eligibility for contributing to Roth IRAs. For details, see the 2019 annual contribution limits. It doesn’t sound like you exceed these limits since you said you already contribute to a Roth IRA, but for people who make too much money, a backdoor Roth conversion is an available option.

The articles below include additional information about investments and Roth conversions which may be helpful.

You should always consult a qualified financial advisor for outlining the best course of action for your personal situation, and always be sure you understand an investment before putting money into it. The right financial planner can help guide you in these important decisions as you save and invest for your future.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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