2015 Contribution Limits

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RevShark

RevShark

TSP Timing
Re: $ The Shark Tank

The IRS has increased retirement contribution limits:

• The elective deferral (contribution) limit for employees who participate in 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan has been increased from $17,500 to $18,000.

http://www.fa-mag.com/news/irs-increases-maximum-allowed-pension-plan-contributions-for-2015-19626.html
 
Re: $ The Shark Tank

Who in the heck has $18,000 extra to drop in the TSP, I never did?
 
Re: $ The Shark Tank

nnuut said:
Who in the heck has $18,000 extra to drop in the TSP, I never did?
Click to expand...
Me! When I got the kids out of the house and reorganized my budget, it took three years of promotions and pay increases to get to where I max'd out my contributions. It wasn't easy, but I did it!

Set goals and set budget, the young ones will need to do it early to pay off what is currently out owe there in national debt.
 
Re: $ The Shark Tank

Frixxxx said:
Me! When I got the kids out of the house and reorganized my budget, it took three years of promotions and pay increases to get to where I max'd out my contributions. It wasn't easy, but I did it!
Click to expand...

Sounds great, but that was back in the days of pay increases and promotions, unlike today!
 
Re: $ The Shark Tank

Frixxxx said:
Me! When I got the kids out of the house and reorganized my budget, it took three years of promotions and pay increases to get to where I max'd out my contributions. It wasn't easy, but I did it!

Set goals and set budget, the young ones will need to do it early to pay off what is currently out owe there in national debt.
Click to expand...

Yep, it isn't easy, but it is doable.
 
Re: $ The Shark Tank

Slowly inching my way to maxing out. Right now I contribute about 16500 annually. Just takes a bit more planning when there's no matching for military (and when you have a wife and 2 hungry boys at home).

Although, I can't complain since under the current system I can draw a pension at age 38.
 
Re: $ The Shark Tank

Frixxxx said:
Me! When I got the kids out of the house and reorganized my budget, it took three years of promotions and pay increases to get to where I max'd out my contributions. It wasn't easy, but I did it!

Set goals and set budget, the young ones will need to do it early to pay off what is currently out owe there in national debt.
Click to expand...

Pay increases, buying a vehicle off lease, paying it off early and keeping it in repair for the next 15 years instead of continually trading in for a newer one, paying down the mortgage early (after paying off the vehicle loan) and putting the interest not paid into retirement account, living close to work, only moving to a new job if the cost of living in new location doesn't offset the new income, etc. etc. paying off credit cards at the end of the month or asap, all that has combined to work for me the past few years.
 
Re: $ The Shark Tank

Lindoug said:
Sounds great, but that was back in the days of pay increases and promotions, unlike today!
Click to expand...

In my Agency, they're trying to take away Administratively Uncontrollable Overtime, which will result in a 30% pay cut. Kinda hard to raise your contributions to retirement when they are looking to cut your pay that much.
 
Re: $ The Shark Tank

RevShark said:
The IRS has increased retirement contribution limits:

• The elective deferral (contribution) limit for employees who participate in 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan has been increased from $17,500 to $18,000.

http://www.fa-mag.com/news/irs-increases-maximum-allowed-pension-plan-contributions-for-2015-19626.html
Click to expand...

You thought $18K was a lot? Read on in the the article. It also says: "Taxpayers 50 years old and over can contribute up to $24,000"!! And if you want to put it into your Roth TSP, that is $37K gross at 35% tax rate. :nuts: I don't know why they even bother putting a 'cap' on it, when so few people can even reach the cap! :blink:
 
Re: $ The Shark Tank

Yes, the catch-up contribution as they call it, for those over 50, was increased from $5500 to $6000. So the combined contribution limit is now $24,000.

What I thought was strange is for those who have an IRA, the limit stays the same as last year: $5500 with a $1000 catch-up contribution for those over 50. Why the difference? It looks like the employer based retirement plans are favored over the individual ones. Maybe the gov. just wants to limit the amount you can roll over into an IRA.
 
For those fortunate enough to be able to max out the contributions, here are some calculations and thoughts about how to adjust your payroll deductions.

You have to contribute an even dollar amount, at least in my agency.

18000/26=$692.31 per pay period.

$692*26=$17992 so you need $8 more to max it and be eligible for the $6k catch up contribution.

$693*26=$18,018. Past experience has shown that if I make the contribution $693 my agency will automatically adjust the last contribution to $675 making it an even $18k.

$6000/26=$230.77 per pay period

$230*26=$5980 so you will need $20 more to max it.

$231*26=$6006. Last contribution should be adjusted to $225.

It may take two to three pay periods for changes to be made so start checking in to this around 1 Dec. After the first of the year check the LES to make sure you don't need to make adjustments.

If you don't trust your agency to not over contribute you can adjust your allocation for one pay period to $700 for regular and $250 for catch up.

PO
 
Interesting that your agency only allows even contributions. You can't make changes through the year if needed, example perhaps being you suddenly find you need more takehome for an emergency situtation? My agency, you can make changes to tsp contributions through the year, just have to submit the change request a pp or 2 ahead of time, we can specify which pp to have the change take effect, as long as its a pp that is not already being processed at NFC.
 
Re: $ The Shark Tank

uscfanhawaii said:
You thought $18K was a lot? Read on in the the article. It also says: "Taxpayers 50 years old and over can contribute up to $24,000"!! And if you want to put it into your Roth TSP, that is $37K gross at 35% tax rate. :nuts: I don't know why they even bother putting a 'cap' on it, when so few people can even reach the cap! :blink:
Click to expand...

If I wanted to put bulk of contributions into new Roth TSP, I'd have quite a bit less takehome than I do now. which would hurt bad when comes time to do home repairs, save for next vehicle, things like that. right now the tax deferral means I don't get hit as hard on income tax witholding. bigger tax bite when all those contributions are not tax deferred=less takehome.

so I'll just keep working on maxing contribs to tax-deferred version of tsp, and save what I can additionally to put into Roth outside of tsp. By not putting into Roth tsp, I have more (potentially) to put into Roth outside of tsp because I have a little more takehome to put aside into Roth outside of tsp (if its not needed for replacement vehicle, home repairs, etc).
 
alevin said:
Interesting that your agency only allows even contributions. You can't make changes through the year if needed, example perhaps being you suddenly find you need more takehome for an emergency situtation? My agency, you can make changes to tsp contributions through the year, just have to submit the change request a pp or 2 ahead of time, we can specify which pp to have the change take effect, as long as its a pp that is not already being processed at NFC.
Click to expand...
Not explaining it well. If you make the contribution as a dollar amount it is even dollars only. If you make it a percentage it may not be an even dollar amount. Percentages must be in whole numbers. Trying to max out your contribution using percentages requires first figuring out how much your basic rate will be (hourly rate x 2049.xxx hours?) and will assume you never get a temporary rate for any reason. This is just easier for me. Set it and forget it.

I can make as many changes as I want during the year providing I do them from work. Personnel apps are no longer available outside the .gov domain. Very curious where you read that I cannot make changes during the year from my post. I reread it and cannot see that.

Changing the subject back to 2015 Contribution Limits from Re: "$ The Shark Tank" since many of us have no access to that tank.

PO
 
Re: $ The Shark Tank

For those fortunate enough to be able to max out their contributions and want to contribute an equal amount every payday, be aware that there are 27 paydays in 2015 if you are on a pay schedule like mine. I just got this from BEST:

Calendar Year 2015 Regular TSP Contribution Amount Correction
------------------------------------------------------------------------
Response Via Email(myPers - Total Force Service Center) - 12/03/2014 03:02 PM
You are receiving this message because our records indicate you have made a regular Thrift Savings Plan (TSP) election, effective 14 December 2014, in the amount of $693.00. The Benefits and Entitlements Service Team (BEST) originally published guidance that stated by electing this amount each pay period, it would ensure you received full matching contributions throughout calendar year 2015. Unfortunately, the contribution amount you were advised to elect was incorrect as it only accounted for 26 pay days in calendar year 2015. There are actually 27 pay days in 2015; therefore, the correct contribution amount to reach the $18,000 elective deferral limit is $667.00 per pay period. As such, BEST is correcting the 2015 TSP contribution amount to $667.00 per pay period, which ensures you do not reach the $18,000 elective deferral limit prematurely. This correction will be processed by BEST and does not require any action on your part.

In the event that you do not wish to have the contribution amounts corrected, or if you have any questions or concerns, you may contact BEST at afpc.dpieb@us.af.mil. Again, if you are in agreement with the corrective action of your TSP election, you are not required to take any additional action. The election will still take effect on 14 December 2014 and will reflect on your 2 Jan 2015 Leave and Earnings Statement (LES).

Thank you.

Benefits & Entitlements Service Team
Click to expand...


You will have to make your contribution adjustment this pay period to have it take affect the first payday in 2015.
 
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