Hi kramzepol!
Thanks for joining us today.
Depending on the amount of earnings that may be forgone by delaying the Roth conversion, I may delay that until the tax impact is equal to or lower than the earnings that may be gained. Distributions sent to multiple destinations at the same time are treated as a single distribution for allocating pretax and after-tax amounts for the pro-rata rule.
"To roll over all of your after-tax contributions to a Roth IRA, you could take a full distribution (all pretax and after-tax amounts), and directly roll over:
- pretax amounts to a traditional IRA or another eligible retirement plan, and
- after-tax amounts to a Roth IRA. "
From this IRS resource: https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans
If the TSP is all pre-tax, the rule doesn't seem to apply. Sending the amount you withdraw from the pre-tax TSP to a Roth, would all be taxable to the extent your total income level exceeds the standard or itemized deduction.
Hope this helps!
Cindy
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