The TSP contribution limit for the approaching new year will be $19,500, which is a $500 increase from the previous annual limit. The amount for catch-up contributions will also increase $500 to $6,500. For most, this means an adjustment needs to be made to the amount taken for their TSP account each pay period. It is a common misconception that a federal worker can contribute the maximum in less than 26 pay periods and still receive the full match. (By putting in $1,000 per pay period for 19 paychecks, for example.) Once that ceiling is reached, the employing federal agency will cease matching their 1% along with the other 4% of an individual’s salary that is eligible to be matched. The only way to get all the money that’s available through the employer’s matching system is by putting the maximum amount in TSP every two weeks.
By dividing $19,500 by 26, you get the amount needed for the full match- $750. If you’re over 50 and can do the catch-up contributions as well, just add $6,500 before dividing- so $26,000/26 would mean changing TSP contributions to an even $1000 per paycheck.
Until Next Time,
**Written by Benjamin Derge, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
TSP Contribution Limits