How To Make The Most of Your 2016 TSP Contributions

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• published: 29 Oct 2015
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The companion blog post for this video can be found here: http://p2rproject.com/2016-tsp-contribution-limits Each year the IRS establishes the maximum employee contribution amount for 401k plans. Thrift Savings Plan (TSP) is subject to those same limits. Visit www.p2rproject.com to get tips, tools & resources just for Federal employees! How To Make The Most of The 2016 Contribution Limits! The regular employee contribution limits remain unchanged from 2015. You may contribute up to $18,000 into your TSP and/or TSP Roth in any combination you wish—not to exceed $18,000. Catch up contributions are available to Federal employees who are age 50 or older in 2016 and who are maximizing their regular TSP contributions. This is an additional contribution. You may contribute up to $6,000 into your TSP and/or TSP Roth in any combination you wish—not to exceed $6,000. FERS employees—DON’T MISS YOU MATCH! If you contribute at least 5% or more in TSP each pay period, you will receive the full match—5% match contributed into your TSP. The FERS TSP Match is made of two parts: 1% automatic match and 4% agency match. The 1% automatic match is just like it sounds—no matter whether or not you contribute to TSP, you’ll receive 1% of your pay deposited into your TSP each pay period. The 4% match, however, is completely dependent upon your contributing at least 5% or more to receive the full match. Can you really contribute too much into TSP? For example, Sam Sample is a FERS employee, and he wants to put the maximum into TSP--18,000 in 2016. He decides that he wants to contribute $1,000 each pay period. Will he receive his full FERS TSP match for the entire year? Upon reaching the maximum contribution of $18,000 in pay period 18, he automatically stops contributing to TSP and misses the 4% match for the remaining pay periods in that year. It’s important to divide the total regular TSP contribution you wish to make by the number of pay period/dates in that year. Frequently Asked Questions: Are there always 26 pay periods? Most years, YES! Occasionally there’s a 27th pay period—check with your payroll office each year to verify. How do you know how you’re putting into TSP now? Check your Leave & Earnings Statement in the deduction area to see how much you’re contributing each pay period. Where does my FERS match go? It’s is always deposited into your TSP—never into your Roth TSP. If I don’t want to change my regular TSP contributions, what should I do? No action is needed, regular TSP contributions continue year after year, unless you make a change. Will my catch up contribution amount carry over to next year? NO! It’s very important that you re-elect catch contributions if you wish them to continue on. PROJECT Prepare2Retire is not affiliated with, endorsed or sponsored by the Federal Government or any US Government agency. PROJECT Prepare2Retire is educational only. No specific financial or retirement advice is being offered. The material presented is as current as possible, but is necessarily generalized. Facts and opinions are based on research and experience, but are not endorsed by the Federal Government. It is recommended to consult with your personnel office and/or the Office of Personnel Management (OPM), Retirement Office. PROJECT Prepare2Retire is an educational division of The Monroe Team, Inc.