Feds and members of the uniformed services seem to like the Thrift Savings Plan’s relatively new Roth investment option.
Taxes: Now or later!
Regular TSP contributions are made on a pretax basis. That means you get a break now, but will see a big chunk of your total TSP balance eaten up by taxes when you start either voluntary or mandatory withdrawals. With a Roth, you are investing after-tax money. That means when you start withdrawing money from your Roth TSP account (assuming you’ve met the IRS rules) it is all yours. No taxes on that money in retirement.
From a tax standpoint, it comes down to this: Do you want to pay Uncle Sam now or later. Apparently, many feds have decided that taxes probably are not going to go down in the future, regardless of which political party controls Congress or the White House. And with a Roth, your nest belongs entirely to you, not Uncle Sam. The caveat is that the Roth money has to be in the account for at least five years and you have to be 59 ½ when you withdraw it or you pay taxes on the earnings in your Roth account.