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Veteran Services: Finance Questions

Finances

You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.

Questions & Answers

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Financial Questions & Answers

Question:

If my grandson in the Navy overseas made a $5000 contribution to a Roth for 2012 in a mutual fund, can he also participate in the Roth TSP during 2012? I’m referencing the article in my current issue in American Legion Magazine in the “Rapid Fire” section about the new Roth TSP arriving in April. I received American Legion Magazine as a Marine during World War II. -Anthony

Answer:

Wow, thanks for your service and that of your family! Thankfully, there’s no connection between the new Roth TSP and your grandson’s Roth IRA. He can actually do both without impacting the contribution limits of either. For those under age 50, $5,000 is the Roth IRA contribution limit while $17,000 is the limit for the TSP. Although, if your grandson or other servicemembers are serving in a tax-free combat zone, contributions made don’t count towards the $17,000. In that case, the maximum total contribution to the TSP would be $50,000. That would be some serious tax-free potential!