What about the ROTH TSP? The TSP web page continues to tell us that the ROTH option will be available in 2011, but is sparse on the details. The ROTH will be ideal for low income military members in 2011, but if the contributions are allowed only late in the year it’ll be tough to get the maximum allowable amount into the accounts in time. The most you can contribute is 100% of your base pay.
If your goal is to contribute the maximum amount to ROTH IRA ($5,000 single/under 50 years of age) and ROTH TSP in 2011 ($16,500 if under 50) in equal monthly installments, begin by contributing $1792 to the ROTH IRA each month. (Add an extra $417 /mo. to max out your spouse’s ROTH IRA.) You’ll get the IRA fully funded for 2011 in about three months. If we still don’t have the ROTH TSP details by then, you can set this same amount aside in a future spending account. Once the ROTH TSP opens, you can put up to 100% of your base pay into the account, and live out of your future spending account.
This plan is ambitious, but if you want to put as much money as possible into the ROTH option, this is a way to do it. Keep monitoring the TSP webpage or YourMilitaryMoney.com for breaking news about the ROTH TSP option.