With respect, the bolded sections in the above quotes are not true. If you're doing catch-up contributions but don't meet the elective deferral limit by the end of the year, the TSP will not return your catch-up contributions. You only have to intend to contribute up to the elective deferral limit to be eligible for catch-up contributions.
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Catch up contribution questions
- Thread starter Glockycharms
- Start date
With respect, the bolded sections in the above quotes are not true. If you're doing catch-up contributions but don't meet the elective deferral limit by the end of the year, the TSP will not return your catch-up contributions. You only have to intend to contribute up to the elective deferral limit to be eligible for catch-up contributions.
Cactus
Well-known member
You need to contribute at least 5% every pay period to max out you matching contribution of 5%. If you stop your regular contributions for any reason you will only receive the automatic 1% matching for the pay periods where you are not contributing. That is why you don't want to reach the maximum ($18,000 for 2016 & 2017) before the end of the year because your agency will stop your contribution for the year when you reach that limit. That's what happened to my co-worker. He maxed out on the 26th pay day so nothing was taken out on the 27th.
On the other hand if you are making catch-up contribution you do have to make sure you do eventually max out for that year or they return your catch-up. They don't make it easy. It is a fine balancing act. Unlike and outside IRA were the limit is either $5500 or $6500 depending on if you turn 50 that year, the Government does treat these two contributions differently. Why? I'm guessing because of the way they have it implemented and only paying matching on regular contributions. It would be so much easier if they would change the limit from $18,000 to $24,000 for those turning 50.
On a side note, if you had a different job where you are also contributing to a company's 401K plan in the same year watch out that the combined contribution doesn't exceed the max. The Government doesn't know about the outside contribution and now you could be in trouble with the IRS.
In my agency (for this year at least) the second to last pay period of 2016 (which starts on Dec. 11 and ends on Dec. 24) is paid out on Jan. 2, 2017. In order to spread the catch-up over all 26 pay periods I have to make my catch-up election before Dec. 24. Another got-cha is that every year-end your catch-up election reverts to zero if you forget to make an election. You cannot just set it and forget it like the regular TSP election.
More GOT-YAS
A) your payroll folks will mess this all up. they do this screw up on a regular basis, and it takes them weeks to fix it. Seems they all are clueless with the CATCH UP process as many are just not doing the savings at this rate. Check every paycheck, and check the cumulative.
B) I don't understand how anyone can do the 26 pay periods, and then on the last 27 period exceed and loose. You already contributed the MAXIMUM in 26 pay periods. you got agency matching at 5%. you are done. the last paycheck you can not get that. Unless they are talking about that they did not exceed the matching at 26 pay checks, and the 27 pay check the full amount was not cut out; and was locked out from contributing a less amount to meet the year end; resulting in not making the $18000 limit, and not being eligible for the extra matching $6000. this would be a major screw up and I can see that happening.
Cactus
Well-known member
Several other got-chas to be aware of:
1) A pay period is not the same as a pay date. The last pay period of 2016 gets paid out in 2017 and counts as a 2017 contribution so you actually need to start this in the last pay period of 2016.
2) You need to make sure you max out your regular contribution ($18,000 for 2017) before the end of the year (second to last pay period) or the government will return all your catch-up contribution to you because you have to max out your regular contribution in order to have a catch-up contribution. The government keeps track of these two contributions separately. They don't make it easy on you.
3) Make sure you make a regular contribution of at least 5% of your salary in every pay period so you get your matching contribution. Matching is only paid on regular contributions, not catch-up.
4) Make sure of the number of pay days (not pay periods) for the given year. For those paid bi-weekly that is usually 26 but occasionally is 27. That was the case in my organization in 2015 and I know one person who lost matching on the last pay day (all except the automatic 1%) because they contributed the maximum based on 26 pay days instead of the 27 for that year.
1) A pay period is not the same as a pay date. The last pay period of 2016 gets paid out in 2017 and counts as a 2017 contribution so you actually need to start this in the last pay period of 2016.
2) You need to make sure you max out your regular contribution ($18,000 for 2017) before the end of the year (second to last pay period) or the government will return all your catch-up contribution to you because you have to max out your regular contribution in order to have a catch-up contribution. The government keeps track of these two contributions separately. They don't make it easy on you.
3) Make sure you make a regular contribution of at least 5% of your salary in every pay period so you get your matching contribution. Matching is only paid on regular contributions, not catch-up.
4) Make sure of the number of pay days (not pay periods) for the given year. For those paid bi-weekly that is usually 26 but occasionally is 27. That was the case in my organization in 2015 and I know one person who lost matching on the last pay day (all except the automatic 1%) because they contributed the maximum based on 26 pay days instead of the 27 for that year.
alevin
Well-known member
You can do that, but when you want to stop having any taken out, you have to go back in and change contribution level back to zero, starting with the very next pp that you don't want anything taken.
example: pp1 of tax year 2017 has paydate in early February, let's say for sake of argument. You want to dump $1000 into catchup from that paycheck. You have to go into your contributions setup earlier than that, and tell the program you want to start putting 1000 into catchup, starting pp1. As soon as the program says that order has cleared, you have to go in and tell the program you want to stop catchup contributions, starting pp2 (if you don't want any taken out for awhile, after pp1).
Let's say you decide later in the spring you want to add another chunk ($500) from pp10 paycheck. Go in ahead of time and tell the program you want to change catchup contributions to $500, starting pp 10. Wait til the program says that order has cleared, then go back in and tell the program you want to stop catchup contributions again, starting pp11.
If you don't want to do any additional catchup the rest of the year, you're good to go at that point. If you want to add another chunk later in the year, say pp18, rinse repeat process above.
example: pp1 of tax year 2017 has paydate in early February, let's say for sake of argument. You want to dump $1000 into catchup from that paycheck. You have to go into your contributions setup earlier than that, and tell the program you want to start putting 1000 into catchup, starting pp1. As soon as the program says that order has cleared, you have to go in and tell the program you want to stop catchup contributions, starting pp2 (if you don't want any taken out for awhile, after pp1).
Let's say you decide later in the spring you want to add another chunk ($500) from pp10 paycheck. Go in ahead of time and tell the program you want to change catchup contributions to $500, starting pp 10. Wait til the program says that order has cleared, then go back in and tell the program you want to stop catchup contributions again, starting pp11.
If you don't want to do any additional catchup the rest of the year, you're good to go at that point. If you want to add another chunk later in the year, say pp18, rinse repeat process above.
Glockycharms
New member
So i take it this is the only way to do it? I cannot dump a thousand or five hundred a couple of times and be done with it?
evilanne
Well-known member
For 2017, you need to make the election sometime in December prior to the start of the last pay period in December that pays out in January. The Catch Up elections had to be renewed each calendar year for my agency whereas the regular contribution remained the same until you actually change it. If you have already turned 50 or will before the end of the year, you can contribute now but it may require a separate transaction. If you don't turn 50 until next year, you can still start contributing in January even if your birthday isn't until later in the year.
alevin
Well-known member
hello GLC. asking questions and getting answers ahead of when you need them is always a good thing. You will have to divide the catchup amount you want to contribute, whatever that is, among the # of payperiods that will count for taxyear 2017, and make sure you start the contributions in the first payperiod where the paydate for that pp actually hits in calendar year 2017, just like for the regular tsp.
You don't have to do that if you want to periodically contribute a single big chunk from a specific paycheck, like $1K or something, but you'll have to immediately go in and change the catchup back to zero for the very next pp, or it will keep withholding the big chunks every pp after that until you get it changed again. It can be done that way if you pay close attention to what you are doing when. I've sometimes waited til after tax season to start catchup withholding to ensure I was able to also contribute some to a Roth account, then kicked up the pp catchup contributions to get the full catchup through the rest of the pay year.
You don't have to do that if you want to periodically contribute a single big chunk from a specific paycheck, like $1K or something, but you'll have to immediately go in and change the catchup back to zero for the very next pp, or it will keep withholding the big chunks every pp after that until you get it changed again. It can be done that way if you pay close attention to what you are doing when. I've sometimes waited til after tax season to start catchup withholding to ensure I was able to also contribute some to a Roth account, then kicked up the pp catchup contributions to get the full catchup through the rest of the pay year.
Glockycharms
New member
Hi guys this is my first post here as I just usually lurk.
I am a current active Fers employee who is eligible next year for my catch up contribution, I am currently at $693 a pay period bi weekly. I cannot find a somewhat detailed explanation of how to go about getting it done.
Do I just add to my current $693 or is there a separate way to add the money to the account? Will the Tsp show a separate window or tab showing how the extra money is adding up as you put it? Can I just add a $1,000 every once in a while till I reach the $6,000 or is that not possible?
I am a current active Fers employee who is eligible next year for my catch up contribution, I am currently at $693 a pay period bi weekly. I cannot find a somewhat detailed explanation of how to go about getting it done.
Do I just add to my current $693 or is there a separate way to add the money to the account? Will the Tsp show a separate window or tab showing how the extra money is adding up as you put it? Can I just add a $1,000 every once in a while till I reach the $6,000 or is that not possible?
