Federal employees and retirees wake up today to one of the most significant enhancements to the Thrift Savings Plan in years: Roth in‑plan conversions. Beginning January 28, 2026, participants can now convert eligible traditional TSP balances into Roth—directly inside their existing TSP accounts. The new feature is available in My Account when logging in through the TSP.gov website.
This long‑anticipated feature has been years in the making, shaped by SECURE 2.0, extensive public comments, and final rulemaking by the Federal Retirement Thrift Investment Board (FRTIB).
Today’s launch also arrives with brand‑new tools and educational resources from the TSP, including a newly released public calculator, a personalized conversion calculator inside My Account, and weekly Roth webinars beginning in February.
A Major New Retirement Planning Tool for Federal Employees
For the first time, TSP participants can convert money from their traditional (pre‑tax) balance to their Roth (after‑tax) balance without leaving the plan. This is known as a Roth in‑plan conversion.
Adding this feature to the TSP means that participants will not have to move funds out of the TSP (i.e. to an IRA) in order to convert them to Roth.
If a participant does not already have a Roth balance, his or her first conversion will automatically create one.
Roth TSP contributions are made with after-tax dollars, and qualified withdrawals—including earnings—are tax-free if at least five years have passed since the first contribution and the participant is 59½, disabled, or deceased. Unlike Traditional TSP accounts, Roth balances are exempt from required minimum distributions (RMDs), allowing retirees to better manage their withdrawals and tax exposure.
A Roth in-plan conversion creates a taxable event: the converted amount is added to your income for the year, and taxes must be paid with outside funds. This feature opens strategic opportunities for managing tax brackets by converting during lower-income years.
How Roth In‑Plan Conversions Work
Roth TSP contributions are made after taxes are deducted from your paycheck, meaning you pay taxes upfront at your current income tax rate. The main benefit of this is that when you retire and withdraw your contributions and qualified earnings, they are tax-free.
Qualified earnings meet two criteria:
- Five years must have passed since January 1 of the calendar year when you made your first Roth TSP contribution.
- You must be at least age 59½, permanently disabled, or deceased.
The TSP itself emphasizes that the first questions participants should ask involve taxes:
- How will the conversion affect taxable income this year
- How much tax will be owed on the amount converted
The TSP also emphasizes that federal employees should consult with a tax advisor prior to performing Roth conversions to see if they make sense for their financial situations.
FRTIB’s Final Rule on Roth In-Plan Conversions
The Federal Retirement Thrift Investment Board (FRTIB) recently issued a final rule in preparation for today’s launch. This rule established some of these key requirements for the Roth conversions:
- Conversion Limits: Participants may request up to 26 conversions per calendar year, aligning with biweekly pay periods.
- Eligibility: Active participants, separated participants maintaining an account, and beneficiary participants (spousal) may convert. Non-spouse beneficiaries and alternate payees are ineligible.
- Minimums: A $500 minimum per conversion and a $500 minimum balance in each contribution type must be maintained.
- Tax Treatment: Conversions trigger taxable income but are not subject to withholding. Taxes must be paid from outside funds.
The FRITB also stated at the time that it was going to be providing educational materials, including web content, notices, and interactive tools, to explain the tax implications of Roth conversions and that it was developing a tax calculator to assist participants in assessing the financial consequences of Roth conversions.
New TSP Tools Available for Participants
These new resources have been gradually rolled out, some of which have just launched.
Public Roth In‑Plan Conversion Calculator
A new calculator on TSP.gov helps participants model:
- How much tax a conversion may trigger
- How different conversion amounts affect taxable income
- How much your future account balance may grow
To use it, you enter details such as the amount you plan to convert, your expected investment growth, and your current and future tax rates. The calculator provides a side-by-side comparison of potential outcomes if you convert traditional TSP funds to Roth or the money in your traditional balance.
Personalized Roth Conversion Calculator in My Account (Launching Today)
This new tool uses actual participant account data to show:
- The tax impact of converting specific holdings
- Side‑by‑side comparisons of different conversion amounts
- How conversions affect Roth vs. traditional balances over time
TSP’s New Tutorial Video
Today, the TSP is publishing a step‑by‑step tutorial video on YouTube demonstrating:
- How to access the new conversion feature
- What to expect during the conversion process
Weekly Roth Webinars Beginning in February
The TSP will host weekly webinars starting mid-February that will include information on Roth in-plan conversions. Participants who are unable to make a live webinar can also see recordings on the TSP’s YouTube page.
Who Might Benefit From a Roth In‑Plan Conversion?
The TSP stresses that it is very important to consult a tax advisor prior to performing Roth conversions. Once they are executed within your TSP account, they cannot be undone.
Everyone’s situation is different, but these are some scenarios in which Roth conversions might make sense:
- Expecting to be in a higher tax bracket in retirement
- Wanting to reduce future Required Minimum Distributions (RMDs)
- Seeking tax diversification in retirement income
- Planning for tax‑free withdrawals later in life
Conversely, participants in high tax brackets today—or those without cash available to pay the tax—may find conversions less appealing.
Final Thoughts: A Transformative New Option for Federal Employees
With in‑plan Roth conversions officially launching today, the TSP is entering a new era of flexibility and tax‑planning sophistication. Federal employees now have access to a tool that has long been available in many private‑sector plans, and the TSP is supporting the rollout with calculators, webinars, and clear guidance.
While Roth conversions may not be right for all federal employees and can potentially be harmful if not done correctly, they are an important retirement and tax planning option that adds even more value to the TSP.
Remember to seek professional financial advice to learn if Roth in-plan conversions will be useful as part of your overall retirement savings plan.
For more information, see these articles:
- Roth TSP Conversions Coming in 2026: What Federal Employees Need to Know
- Tax Today, Freedom Tomorrow: Understanding the TSP’s New In-Plan Roth Conversion Proposal
- Roth Conversions Are Coming to the TSP; Why That May Hurt More Federal Employees Than It Helps
- Why Some of Your Contributions Should Be in Roth TSP
- Big Changes Coming to the Thrift Savings Plan in 2026
