Roth vs traditional TSP: how each is taxed

The difference is when you pay income tax. Traditional TSP contributions come out of your pay before income tax, so you pay tax later, when you withdraw. Roth TSP contributions come out after income tax, so qualified withdrawals, including all the earnings, are tax-free. You can use either one or split your contributions between them, and your service or agency's automatic and matching contributions always go into your traditional balance.

Side by side

	Traditional TSP	Roth TSP
Income tax on contributions	Not now (lowers today's taxable pay)	Yes, now
Income tax on withdrawals	Yes, on contributions and earnings	None on qualified withdrawals
Qualified withdrawal (tax-free earnings)	Not applicable	5 years from January 1 of the year of your first Roth contribution and age 59½ (or disability or death)
Counts toward the $24,500 limit (2026)	Yes, combined with Roth	Yes, combined with traditional
Matched	Yes	Yes (the match goes into traditional)
Required withdrawals starting at 73 or 75	Yes	No, since 2024

For withholding rates and the 10% penalty, see how TSP withdrawals are taxed.

The same $1,000, two tax treatments

This is tsp.gov's own example, with a gross income of $50,000 and a 20% tax withholding rate:

Contributing. $1,000 to Roth doesn't change your taxable income. The same $1,000 to traditional lowers your taxable income by $1,000, so $200 less is withheld and your net pay is $200 higher.
Withdrawing. At the same 20% rate, a $1,000 withdrawal of traditional money leaves you $800. A $1,000 withdrawal of Roth contributions and qualified earnings is the full $1,000.

The real comparison is your tax rate now versus your tax rate when you withdraw, and nobody knows the second number for certain.

How withdrawals, loans and investment changes use each balance

The TSP keeps your traditional and Roth money in separate balances inside one account.

Withdrawals: you choose whether the money comes from your traditional balance only, your Roth balance only, or both in proportion.
Loans and investment changes: these always take a proportional amount from each balance. If 80% of your account is traditional and 20% is Roth, a loan comes 80% from traditional and 20% from Roth.

What's new in 2026

Roth in-plan conversions. Since January 28, 2026, you can convert money from your traditional TSP balance to Roth inside your account. The amount converted is added to your taxable income for that year, and a conversion can't be undone. The tax on a conversion is paid with money from outside the TSP, such as savings; it can't be taken out of the converted amount.
Roth catch-up for higher earners. If your 2025 FICA wages from your federal or military employer were over $150,000, any catch-up contributions you make in 2026 must be Roth. See TSP contribution limits for 2026.

In the military: the match and combat-zone pay

Three rules apply only to service members, and they change the Roth vs traditional math more than anything else on this page.

The BRS match is always traditional. Your service's automatic 1% and matching contributions go into your traditional balance, even if you contribute only to Roth. If you pick Roth for your own money, you'll end up holding both. See how the military TSP match works.
Combat-zone pay in Roth is never taxed. Pay earned in a combat zone tax exclusion area isn't taxed. If you put it in Roth, qualified withdrawals, earnings included, are tax-free too. If you put it in traditional, those contributions come out tax-free later, but the earnings on them are taxable.
In a combat zone, traditional can go higher than Roth. Tax-exempt traditional contributions from combat-zone pay don't count toward the $24,500 limit. Their cap is the $72,000 total of everything added to your account in 2026, including your service's contributions. Roth contributions still stop at $24,500. Any catch-up contributions you make from tax-exempt combat-zone pay must be Roth, whatever your income.

Contributing from combat-zone pay in 2026	Roth	Traditional (tax-exempt)
Taxed going in	No	No
Taxed coming out	No, if qualified (earnings too)	Contributions no, earnings yes
How much	Up to $24,500, shared with your regular traditional contributions	Above $24,500, up to $72,000 in total additions, including your service's contributions
Catch-up at 50+	Allowed	Not allowed from tax-exempt pay

If you reach a limit before your last pay period of the year, your contributions stop for the rest of the year, and so does your match. See how to keep your match while contributing a lot.

What people weigh when choosing

There's no universal answer, and it depends on your situation. Things people commonly consider:

Tax rate now vs later. Traditional saves tax at today's rate; Roth avoids tax at your future rate. Nobody knows future tax rates for certain.
Flexibility later. Having both traditional and Roth money can give more choices about taxable income in retirement.
Take-home pay. For the same percentage contributed, Roth reduces your paycheck more today, because tax is paid on it now.
It isn't a one-time choice. The TSP lets you change the tax treatment of future contributions whenever you want, and you can split them between traditional and Roth.
A Roth IRA is separate. A Roth IRA outside the TSP has its own limit, so it doesn't reduce how much you can put in Roth TSP.

A tax professional can help you apply these to your own situation.

Common questions

What is the difference between Roth and traditional TSP?

Traditional TSP contributions are made before income tax and taxed when withdrawn. Roth TSP contributions are made after income tax, and qualified withdrawals, including earnings, are tax-free.

Is the TSP match Roth or traditional?

Always traditional. Agency and service automatic and matching contributions go into your traditional balance, even if you contribute only to Roth.

When are Roth TSP withdrawals tax-free?

When 5 years have passed since January 1 of the year you made your first Roth TSP contribution and you're 59½ or older (or disabled or deceased). Your own Roth contributions always come out tax-free.

Can I convert traditional TSP to Roth?

Yes. Since January 28, 2026, the TSP allows Roth in-plan conversions. The converted amount is taxable income for the year, and conversions can't be reversed.

Does Roth TSP have required minimum distributions?

No. Since 2024, Roth balances in the TSP aren't subject to required minimum distributions during your lifetime. Traditional balances still are.

Can I change from traditional to Roth TSP contributions?

Yes. You can change the tax treatment of your future contributions whenever you want, and you can split contributions between traditional and Roth. Money already in your traditional balance stays traditional unless you do a Roth in-plan conversion.

Does a Roth IRA count against the Roth TSP limit?

No. A Roth IRA outside the TSP has its own separate limit. The 2026 TSP limit of $24,500 covers your traditional and Roth TSP contributions combined.

Which balance does a TSP withdrawal come from?

You choose: traditional only, Roth only, or both in proportion. Loans and investment changes are different. They always take a proportional amount from each balance.

Should I use Roth or traditional TSP in a combat zone?

Combat-zone pay isn't taxed, so Roth contributions from it are never taxed going in, or coming out if the withdrawal is qualified. Traditional tax-exempt contributions come out tax-free too, but their earnings are taxed. Traditional is the only way to contribute more than $24,500 from combat-zone pay in 2026, up to the $72,000 limit on total additions.

Can I make TSP catch-up contributions from combat-zone pay?

Yes, but they must be Roth, whatever your income. You can't make catch-up contributions from traditional tax-exempt pay, or from incentive, special or bonus pay.

Sources

Educational information, not investment or tax advice. Check tsp.gov or a tax professional for your situation.