TSP Contribution FAQs

Here are some frequently asked questions we see from Federal employees in regards to their TSP contributions.

I want to max out my TSP contributions for the year, but I want to be finished contributing by November so I will have extra money on my last few paychecks for Christmas expenses. Is there any downside in doing this?

CSRS employees: there is no problem with scheduling your contributions this way.

FERS employees: if you do not contribute to the TSP for several pay periods, you will not receive the government match on your contributions for those pay periods. You certainly do not want to miss out on free money (matching). For 2016 contribution limits, the per pay period amount to ensure you contribute the maximum throughout the entire year is $692 for regular contributions and $230 for catch-up contributions. If you have been contributing more than this, you can readjust your contributions based on the amount you have already contributed for the year.

Now that I am 50 years old, how do I begin making catch-up contributions?

Catch-up contributions allow you to increase your contribution amounts in the year you turn 50 and each year thereafter as a way to speed up the accumulation process as you approach the distribution phase. The limits are set by the IRS every year, and according to the IRS, “contributions…are due by the due date of your tax return (not including extensions).”

You will need to complete and submit the TSP-1-C form, located on the TSP website. This form has to be completed every year you wish to make catch-up contributions. Do not increase your regular contribution amount over the $692 per pay period (for 2016) thinking the extra will count as your catch-up. You actually need the regular election and the catch-up election in order for this to be accurate. If you are not sure whether or not your contributions are set up correctly, look at your pay stub; you should see two line items, one for regular contributions and one for catch-up.

How much can I contribute to the Roth TSP? Will I still receive my FERS match?

The Roth TSP has the same limit as the Traditional TSP. For 2016, it is $18,000 and an additional $6,000 for employees age 50 and older. These limits apply to TSP as a whole. If you contribute to both Traditional and Roth TSP, you will need to split the $18,000 (or $24,000) between the two options. FERS still receive the government match even if all contributions are allocated to the Roth TSP. The government match will always be assigned to your Traditional TSP balance.

For more information on Roth TSP, visit our What is Roth? web page.

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About Us
Retirement Benefits Institute provides benefits and retirement training to federal employees. Our trainers and sponsors have instructed thousands of federal employees, making it possible for many of those to obtain personal consultation and receive assistance in specific federal benefit planning to maximize their assets. Contact us for more information at (877) 864-1145 or click this link to email us.

Disclosure The information contained in this blog should not be used in any actual transaction without the advice and guidance of a tax or financial professional who is familiar with all the relevant facts. The information contained here is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for the individual’s specific circumstances or needs and may require consideration of other matters. RBI is not a broker-dealer, investment advisory firm, insurance company, or agency and does not provide investment or insurance-related advice or recommendations. Brandon Christy, President of RBI, is also President of Christy Capital Management, Inc., a Registered Investment Advisor.