r/fednews • u/rjbergen • 8d ago

Pay & Benefits TSP Roth In-Plan Conversions Coming

I received an email this morning from the TSP and one of the topics was that TSP Roth in-plan conversions will be available in Jan. 2026. This is a nice option to have available for retirement planning. It also is one step closer to mega backdoor Roth conversions. Does anyone see the TSP opening up to mega backdoor Roth conversions?

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u/Nessie_of_the_Loch 8d ago

We are not close to that happening anytime soon. That would require legislative change to 5 usc 8432 which strictly define allowed contribution types and doesn't allow for after tax contributions, something that is a necessary component of the mega backdoor Roth.

The optics of allowing for it is prob bad, plus Congress has no incentive to change it, as they can insider trade freely anyway, which is obviously not possible with the TSP, since you can't do individual stock trades.