Re: [TSP_Strategy] Last year of service TSP contributions

 

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On Aug 14, 2017, at 3:59 PM, JM Bud jmbud2@gmail.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:

 

Good strategic question for this once-per-career event! 

FERS employees only get the match of up to 5% of basic salary in the pay periods they make a contribution. Matching stops when you reach the annual limit of $18,000. So, you'd lose the rest of those, but you're going to miss them anyway because your salary stops too.

So, it looks like you should be able to smoothly contribute the full $18,000 (plus $6000 in catch-up contributions I suppose) in the first half of the year as you suggested in your example. To me that sounds like a good way to bump up your TSP account before your salary stops. Do you agree?

Here is an excerpt from the TSP Fact Sheet on "Annual Limit on Elective Deferrals," OC 91-13 (11/2016). .

Does it make a difference if I reach the annual

limit before the end of the year?

Yes. You should keep the annual contribution limit in

mind when deciding how much you will contribute to

your TSP account each pay period. If you reach the annual

maximum too quickly, you could lose some Agency

Matching Contributions because you only receive

Agency Matching Contributions on the first 5% of your

basic pay that you contribute each pay period. If you

reach the annual limit before the end of the year, your

contributions (and consequently your Agency Matching

Contributions) will stop. (If you are purposely making

larger contributions early in the year in an attempt to

maximize your earnings, be aware that the amount you

could lose in Agency Matching Contributions would, in

all likelihood, be far greater than the value of the added

earnings you might receive by making employee contributions

sooner.)

On Mon, Aug 14, 2017 at 11:29 AM, goody7531@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:

 

In the last year of service, if you don't want to work the full year, is it still possible to max out your TSP contributions?  Can you increase TSP deductions and still get the 5% matching?  Say for instance, you want to only work 13 pay periods the last year.  Could you divide the max, contribution, $18,000 by 13 = $1,384 per pay period, and still get the 5% matching in 13 pay  periods instead of the usual 26?

Tia,

Tony

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Posted by: John <busterpurplehaze@yahoo.com>

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