By Tom Temin
Anchor and commentator
FederalNewsRadio

If you were hoping to enroll in a Roth Individual Retirement Account in January, you’ll have to wait a bit longer.

The Federal Retirement Thrift Investment Board has delayed rollout of the Roth 401(k) TSP option until April of 2012.

GovExec reports the postponement is designed to give federal payroll offices more time to prepare their systems.

Renee Wilder is the board’s research and strategic planning director. She tells Federal Times, the board itself is nearly finished with its own software changes needed to enact the Roth option.

By moving the option to April, the board avoids launching the Roth option during the TSP’s busiest transaction season.

TSP Executive Director Gregory Long told FederalTimes the Roth changes are “the biggest thing on our plate – it affects virtually everything.”

FederalTimes explains “the Roth option is expected to primarily benefit military service members and select groups of federal employees, such as judges. Most federal employees are likely to have lower incomes and lower taxes in retirement than they do while working and making contributions, and would not benefit from a Roth investment option.”

However, Senior Correspondent Mike Causey explains, the “Roth is attractive to many people, especially younger workers, because it is funded with after-tax money. That means all of the earnings from your investment (remember when that was a possibility?) are yours, tax-free when you start tapping your account.”

(Additional reporting by Suzanne Kubota.)

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