If you work less than a full year, can you max out TSP contributions before retiring

[Tarzan1963]

I plan to retire in March 2024. Can I contribute 100% of my pay for the three months (6 pay periods) prior to retiring to get the tax benefits and will I get the full government match?

 

[Bullitt]

Whether you contribute 5% or 50%, only 5% is matched. You can contribute as much as you want otherwise. If you max your TSP before year end and are still working, the government will not match contributions after that point since there's nothing left to match.

 

[James48843]

The answer is no. You can only get up to 5% of your earnings per pay period matched. And you cannot put in to TSP more then the total (100%) of earnings of the pay period.


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[nasa1974]

Tarzan1963, Welcome to TSPTalk.

 

[jimmyribs]

I put in my entire pay for the last 11 months before I retired, it worked out much better then putting money in the bank.

 

[tsptalk]

I put in my entire pay for the last 11 months before I retired, it worked out much better then putting money in the bank.

Interesting. How did that work out with taxes? How much of that was deductible?

 

[Bullitt]

I put in my entire pay for the last 11 months before I retired, it worked out much better then putting money in the bank.

LOL. What?

 

[Tarzan1963]

Thanks!!!

 

[jimmyribs]

Interesting. How did that work out with taxes? How much of that was deductible?

Normal tax and payroll deductions were paid. I was fortunate enough to have sufficient funds to do so. The point is to increase your TSP pot before you retire.
I retired 2007. After taking monthly payments over that period ,I still have close to the balance I started with.
If the TSP does not soon improve ,will probably invest in different 401k options.


[h=2]Fedsmith[/h][h=2]Total TSP Fund Returns: 2008 – 2022[/h]There have always been ups and downs in the stock market. It is human nature to look to more recent events and react to that recent information. It is more beneficial to review how these TSP Funds have performed over a longer term, including the downturns of 2008 and 2022.

• C Fund Total Return: 160.35%
• S Fund Total Return: 155.33%
• I Fund Total Return: 60.95%

 

[Tarzan1963]

Thanks Jimmyribs - So, if you figure out what'll your deductions are and then put the remainder into the TSP, you'll get the tax benefits and only the 5% match per paycheck? At the end of the day, you can put the remainder of your paycheck into the TSP and it will be treated as pre-tax dollars.

 

[Bullitt]

There is no set limit on the maximum paycheck contribution except what is required for tax withholdings - and your income must have FICA withholdings even if you do not have anything withheld for local, state, or federal income tax. That means around a 90% contribution is all that's possible. Not sure of the exact numbers for what TSP allows though.

 

[jimmyribs]

Added up all reductions and left a 100$ buffer in case of unseen deduction, and made monthly deposit of what was left to TSP

Thanks Jimmyribs - So, if you figure out what'll your deductions are and then put the remainder into the TSP, you'll get the tax benefits and only the 5% match per paycheck? At the end of the day, you can put the remainder of your paycheck into the TSP and it will be treated as pre-tax dollars.