Do you understand the differences between the traditional and Roth Thrift Savings Plan (TSP) options available to Postal Service employees?
If not, here’s what you should know:
• Traditional contributions are made pretax. Your contributions are deducted before federal, state and other applicable taxes. This type of contribution is taxed at the time of withdrawal.
If you anticipate retiring at a lower tax rate than you currently pay, experts say you should consider traditional contributions.
• Roth contributions are taxed up front. These contributions don’t reduce your taxable wages. The contributions are deducted after federal, state and other applicable taxes.
By paying the taxes when you contribute, you don’t have to pay taxes when withdrawing your money in retirement.
If you anticipate that your tax rate will be higher when you retire, experts say you should consider a Roth TSP.
• How USPS contributions work. All Postal Service contributions are always deposited as traditional contributions.
If you’re a Federal Employees Retirement System (FERS) employee and you put 5 percent of your income into your TSP, the Postal Service will contribute an additional 5 percent.
USPS encourages employees to save more by investing in a TSP account early and consistently.
Use PostalEASE on LiteBlue to view or change your TSP contributions. You’ll need your employee identification number and password.