Can You Trust the Government Not to Change Rules on Roth? | Financial Advisor | Christy Capital

Can you trust the government to not change the rules regarding Roth? Currently, it’s tax-free. Do you think the government will change it up and mess with Roth in the future?

One of the key aspects of retirement planning is tax planning. Many of you have large traditional TSP balances which are yet to be taxed. You have deferred the taxes until later and at some point, later is going to be upon you. And a lot of that involves Roth planning, but what if the government changes their mind on the rules?

I was listening to a podcast called The Great Retirement Debate with Ed Slott and Jeff Levine. They bring up some good points and I wanted to share some of them with you.

The information provided is not intended as tax or legal advice. Figures shown are for illustrative purposes only furthermore, the information nor the illustrations provided may not be used to avoid any tax penalties. This content represents the general views of Christy Capital Management and should not be regarded as personalized investment advice Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice. Retirement Benefits Institute, Inc., and a portion of its contents merged with Christy Capital Management Inc. Brandon Christy, former President of Retirement Benefits Institute, is also the current President of Christy Capital Management, Inc., a registered investment adviser.

[Comut-dm]

I would expect that it will not be taxed as promised. However, it could be added back as non taxable income thus increasing your Medicare cost reducing your Social Security check. They have already changed RMD payouts allowing you to hoard more. However, the next generation pays more as a beneficary under the new laws.

[johnholmes]

That’s a big fat NO! 😂
Trust Gov’t? Those two words just don’t belong together!

[Dave-swdm]

They did it to social security in the 80s. If too many go into Roth the government could start taxing the gains within the Roth.

[pdxmusl]

Changing the law to divert income to 401k vs social security would be a good way to dump the ss program in the long run. Ss gives less than a 2% return 😂. For some people it's negative return. Its pretty terrible. If you rely on ss you'll work way longer than you would had it not exist. It may have been a good idea back in the day. But its a pretty terrible one now.

[steves]

The base amount tax has already been paid. So worst case they could lie and tax the earnings but nothing else

[Morris-Monet]

They are Roth happy because of the huge deficit, which helps now but will make it worse in the future. Typical government shortsightedness. If they ever change the rules, it won't take affect the day they announce it, giving you time to lock in your gains and get the money out tax free.

[scottsellers]

It's my understanding that in 2026 you can do TSP conversions to Roth TSP