hello all, i’ll keep this as transparent as possible. i’m very new to finance and investing, so my logic of thinking here may be skewed and feel free to add any corrections where i could be wrong.
i’m a new hire GS-7 and will go 7-9-11 within the next two years and throughout my career i expect to be in a higher tax bracket than what i am in currently. over 2020 i amassed ~$8,000 in my traditional TSP account thru the C/S index funds.
i want to jump ship to a roth account w TSP, but if i understand correctly, i can’t just swap it directly to roth funds. i’d have to cash out of my traditional funds, and put it into a separate roth ira somewhere (i think?).
if i take out the money from my traditional TSP funds now, should i: (a) open up a roth ira with someone like vanguard and pour it back all in there, so i will have roth tsp funds and a roth ira somewhere else? or (b) use the $8,000 to pay off parts of my student loan (2 separate $7,000 loans) which have crappy APRs? i’m currently going to get it refinanced w Sofi at a lower rate but will end up paying the same amount monthly as i am lowering the loan life.
NOTE: i will be able to afford paying all my monthly expenses (at the minimum rates) even without the extra $8k, but i’d like to get out of that student debt hole bc over 15 years i’d pay as much in interest as my original loan amount.
any advice here would be much appreciated, as r/militaryfinance has been very helpful bc my parents do not have any investing/finance guidance to offer![Frown :( :(](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
i’m a new hire GS-7 and will go 7-9-11 within the next two years and throughout my career i expect to be in a higher tax bracket than what i am in currently. over 2020 i amassed ~$8,000 in my traditional TSP account thru the C/S index funds.
i want to jump ship to a roth account w TSP, but if i understand correctly, i can’t just swap it directly to roth funds. i’d have to cash out of my traditional funds, and put it into a separate roth ira somewhere (i think?).
if i take out the money from my traditional TSP funds now, should i: (a) open up a roth ira with someone like vanguard and pour it back all in there, so i will have roth tsp funds and a roth ira somewhere else? or (b) use the $8,000 to pay off parts of my student loan (2 separate $7,000 loans) which have crappy APRs? i’m currently going to get it refinanced w Sofi at a lower rate but will end up paying the same amount monthly as i am lowering the loan life.
NOTE: i will be able to afford paying all my monthly expenses (at the minimum rates) even without the extra $8k, but i’d like to get out of that student debt hole bc over 15 years i’d pay as much in interest as my original loan amount.
any advice here would be much appreciated, as r/militaryfinance has been very helpful bc my parents do not have any investing/finance guidance to offer