February 24, 2026
The Thrift Savings Plan is rolling out a significant new option for federal employees and service members: Roth in-plan conversions. In a conversation on Fed Gov Today with Francis Rose, Jim Kaplan, Director of External Affairs at TSP, explains what the change means, why it’s happening now, and what participants should consider before making a move.
As of January 28, TSP participants can convert money from their traditional TSP account into a Roth account within the plan. The concept is straightforward: participants pay taxes on the converted amount now, and in exchange, qualified withdrawals in retirement are tax free. But Kaplan is clear that the decision requires careful planning.
“The biggest thing to keep in mind,” he says, is that any money converted will be treated as income for the year of the conversion. That means participants will owe taxes when they file next year. He advises anyone considering a conversion to ensure they have funds set aside from another source to cover the tax bill. Because of that immediate tax impact, Kaplan strongly recommends consulting a tax advisor before making any major changes.
To help participants evaluate their options, TSP launches new calculators. One is publicly available at TSP.gov, while a personalized version is accessible within a participant’s My Account. The personalized tool allows users to input their balance and financial details to estimate their potential tax liability and determine whether a conversion makes sense based on income, growth expectations, and time horizon.
Kaplan says the new feature is driven by participant feedback. Surveys reveal that among the relatively small percentage of participants rolling money out of TSP, some cite the lack of a Roth conversion option as a reason. While it represents a “percentage of a percentage,” the interest is meaningful enough for the Federal Retirement Thrift Investment Board to prioritize building the capability. After announcing the plan in winter 2024, TSP spends the year developing processes, building calculators, producing training materials, and conducting extensive testing before the January launch. Early adoption is steady, with more than 1,000 participants per day exploring conversions in the first days.
The Roth rollout also highlights the flexibility of TSP’s Converge system. Kaplan explains that innovation days bring together board staff and technology partners to identify improvements and enhancements. The system now supports 100 percent review of participant service calls, replacing older sampling methods and strengthening quality assurance.
Kaplan also discusses broader participant behavior trends. During the recent government shutdown period, My Account logins increase by 30 percent compared to the prior year, totaling 12.5 million logins. Hardship withdrawals rise 77 percent. He notes that such spikes align with patterns seen across the retirement industry during uncertain times. While loans provide short-term relief—since participants repay themselves with interest at the G Fund rate—withdrawals permanently reduce retirement savings. TSP processes loans quickly and accurately, helping participants navigate challenging periods