Should I Do a Roth Conversion? A TSP Guide
March 5, 2026
What is a Roth conversion and how does it work? The tax implications of converting pre-tax dollars to a Roth account When it makes sense to do a Roth conversion (timing, income levels, tax brackets) The new TSP rule effective 2026 allowing internal Roth conversions
In this episode of What Works Wednesday, Cody Hawkins from PeaceLink Financial Planning explains the ins and outs of Roth conversions, especially in light of the 2026 rule change allowing federal employees and military personnel to convert TSP funds internally. Whether you're considering switching your retirement accounts or planning for future tax efficiency, this episode covers key insights to help you make informed decisions.
Key Topics:
What is a Roth conversion and how does it work?
The tax implications of converting pre-tax dollars to a Roth account
When it makes sense to do a Roth conversion (timing, income levels, tax brackets)
The new TSP rule effective 2026 allowing internal Roth conversions
Why taxes are not automatically withheld during conversions
Considerations for military and federal employees
The importance of planning and running the numbers before converting
Irreversible nature of Roth conversions and potential mistakes
Strategic timing: low-income years, career transitions, or before retirement
How Roth conversions can reduce required minimum distributions and create tax-free income
Resources:
Thrift Savings Plan (TSP) Changes
From Military to Real Estate: A Guide for Career Switchers
Take the Financial Health Assessment at realestatesuccesspod.com
Get in touch with PeaceLink:
Website: PeaceLink Financial Planning
Instagram: @peacelinkfp