Any Army Retired have that TSP? How is it?
Was it worth it? Are you getting taxed out of those checks a sizable chunk or a negligeble one?
- 1 decade agoFavorite Answer
The TSP acts much like a 401K because they are both qualified plans. Yes it is growing tax deferred, but upon withdrawal, you will be paying regular income tax on the amount you take out, as well as capital gains on returns you were given.
I have done financial plans for the past 6 years and I have yet to see someone who was able to solely retire on a TSP or 401K.
Some other options are a Roth Ira or Roth 401K depending on suitability. These types of plans allow you to fund them with money that has already been taxed. Although you do not get the tax break now you will not be paying income tax upon withdrawal. Would you rather pay tax on the seed or the crop? Would you rather pay taxes when you have an income or when you are retired? It depends on your situation, but there are a plethora of other investment vehicles out there that will outperform a TSP in the long run.Source(s): Financial Planner
- DLv 51 decade ago
You do NOT get taxed on your TSP until you start to withdraw money from it. So until you start to withdraw it is not taxed. You can leave it in there to gain/lose money depending on the value of the fund you have it invested in currently.Source(s): Retired Army.