New VA employee from Chicago!!!

[nasa1974]

Boy am I glad I never had to deal with this!:embarrest: CSRS!

Me too.

 

[Frixxxx]

Frixxxx,

I mention this to ensure someone crunching numbers regarding your examples on this thread have the correct info and I have a question.

Correct me if I misinterpretted what you are saying, but we don't get 5% matching. We get 4%:

As a FERS participant, you receive matching contributions on the first 5% of pay that you contribute each pay period. The first 3% of pay that you contribute will be matched dollar-for-dollar; the next 2% will be matched at 50 cents on the dollar.

And the agency 1% contribution does not get discontinued if a person exceeds the $16,500 limt but does the 1% count towards the $16,500?

Thanks

http://www.investopedia.com/articles/retirement/08/thrift-savings-plan.asp#axzz1RFb5CqMU
I think spells it out best:
"These contributions are neither deducted from your pay, nor do they increase your pay for income tax or Social Security purposes. The two types are:

1. An automatic, nonelective contribution of 1% of compensation that is made to an employee's account when he or she becomes eligible
2. A matching contribution that is made only to the accounts of employees who make salary deferral contributions."

 

[nnuut]

Boy am I glad I never had to deal with this!:embarrest: CSRS!

 

[Scrappy]

Welcome NewHire11,

If that is too much, just make sure to get the matching 5% for 5% of your pay....

Good Luck and Good Investing!

Frixxxx,

I mention this to ensure someone crunching numbers regarding your examples on this thread have the correct info and I have a question.

Correct me if I misinterpretted what you are saying, but we don't get 5% matching. We get 4%:

As a FERS participant, you receive matching contributions on the first 5% of pay that you contribute each pay period. The first 3% of pay that you contribute will be matched dollar-for-dollar; the next 2% will be matched at 50 cents on the dollar.

And the agency 1% contribution does not get discontinued if a person exceeds the $16,500 limt but does the 1% count towards the $16,500?

Thanks

 

[Bquat]

ok....but if i specify 1270 a paycheck...by the time its time for me to get my last paycheck, taking 1270 out for tsp on my last paycheck will go over the 16500 max for the year by $10....so my question is....will $1270 be taken out the last paycheck for the year or will whatever is left over to meet the max of 16500 will be automatically get taken out? which in my case will be $1260 for the last paycheck....or do I have to change it myself so I dont go over the 16500 tsp max...thanks!

You might want to drop that a little.

I heard somewhere you may lose matching funds for the months after you max out.

 

[Sensei]

Example:

You make $50K/yr. If you contribute 5% only that is $2,500.
Your contribution::::::: $2,500 - tax deferred
Employer contribution:: $2,500 - non-taxable benefit
Total contribution year: $5,000 in your TSP account

Now if you max your contribution:
Your contribution::::::: $16,500 - tax deferred
Employer contribution:: $2,500 - non-taxable benefit
Total contribution year: $19,000 in your TSP account

If you get to $16,500 BEFORE the end of the tax year, you will NOT receive matching in those pay periods. (i.e. November 20th pay period you over paid into TSP and now have $17,000 in contribution)

Make Sense?

Yeah, it makes sense. It means that if you are contributing $634 every pay period, you will hit $16,500 before the end of the year and won't receive agency matching for the last pay period or two in December. Why don't you verify with your LES and put the argument to bed? Speaking of which, good night!

 

[Frixxxx]

Sorry to beat a dead horse, but here's a copy & paste from the link you were kind enough to share:

Example:

You make $50K/yr. If you contribute 5% only that is $2,500.
Your contribution::::::: $2,500 - tax deferred
Employer contribution:: $2,500 - non-taxable benefit
Total contribution year: $5,000 in your TSP account

Now if you max your contribution:
Your contribution::::::: $16,500 - tax deferred
Employer contribution:: $2,500 - non-taxable benefit
Total contribution year: $19,000 in your TSP account

If you get to $16,500 BEFORE the end of the tax year, you will NOT receive matching in those pay periods. (i.e. November 20th pay period you over paid into TSP and now have $17,000 in contribution)

Make Sense?

 

[Sensei]

See below:
https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml
Since your matching is not a "pay" item, it is not taxable. Just like your FEHB contribution is not taxable.
If you manage right, you will not lose out on matching contributions.

Sorry to beat a dead horse, but here's a copy & paste from the link you were kind enough to share:

How to get the max.
In order to get the maximum Agency Matching Contributions, you must not only contribute 5% of your basic pay each period, but you must also contribute all year long. If you reach the IRS annual limit before the end of the year, your contributions (and consequently, your Agency Matching Contributions) will stop.

 

[Frixxxx]

Are you certain of this? Not that I doubt you, but the teachers' union constantly reminds us not to max out too early b/c we'll lose out on matching contributions. I wouldn't know from experience, as I've never been fortunate enough to come close to maxing out. Maybe some day...

See below:
https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml
Since your matching is not a "pay" item, it is not taxable. Just like your FEHB contribution is not taxable.
If you manage right, you will not lose out on matching contributions.

Easy worksheet contained here:
https://www.tsp.gov/PDF/formspubs/oc91-13.pdf

Hope this clears it up for you and others....

 

[Sensei]

Employer's contribution's do not count against employee contibutions. Employer contributions are a benefit, not salary.

Are you certain of this? Not that I doubt you, but the teachers' union constantly reminds us not to max out too early b/c we'll lose out on matching contributions. I wouldn't know from experience, as I've never been fortunate enough to come close to maxing out. Maybe some day...

 

[RealMoneyIssues]

My bad. That's what I get for jumping into the middle of a conversation. I'm better off sticking to my jabs on your market moves. :laugh:

True, TSP isn't doing so good, but my SDIRA is up 11%

 

[jpcavin]

Not mine!!! I can't afford that...


I was referring to his situation...

My bad. That's what I get for jumping into the middle of a conversation. I'm better off sticking to my jabs on your market moves. :laugh:

 

[Frixxxx]

Actually, if I understand correctly, the thing to do is calculate 5% of your gross salary for each pay period, and multiply it by the number of pay periods left this year. Then subtract that sum from $16500. That would give you the total amount you'll need to contribute while maximizing your employer's contribution. Otherwise you'll hit the max and the employer won't match during the final pay period.

Employer's contribution's do not count against employee contibutions. Employer contributions are a benefit, not salary.

Isn't this your MONTHLY contribution? Wouldn't apply to someone that gets paid 26 times a year. Gotta take the number of pay periods into account.

NewHire11 only has 13 pay periods left in the year.

 

[RealMoneyIssues]

Isn't this your MONTHLY contribution? Wouldn't apply to someone that gets paid 26 times a year. Gotta take the number of pay periods into account.

Not mine!!! I can't afford that...

So with exactly 13 pay periods left....its seems like I would need to put away 16500/13 = $1270 away a pay period! yikes!

I was referring to his situation...

 

[jpcavin]

Welcome !!!

And, I would go with $1,269 so you won't go over the limit...

Isn't this your MONTHLY contribution? Wouldn't apply to someone that gets paid 26 times a year. Gotta take the number of pay periods into account.

 

[Sensei]

Welcome !!!

And, I would go with $1,269 so you won't go over the limit...

Actually, if I understand correctly, the thing to do is calculate 5% of your gross salary for each pay period, and multiply it by the number of pay periods left this year. Then subtract that sum from $16500. That would give you the total amount you'll need to contribute while maximizing your employer's contribution. Otherwise you'll hit the max and the employer won't match during the final pay period.

 

[RealMoneyIssues]

ok....but if i specify 1270 a paycheck...by the time its time for me to get my last paycheck, taking 1270 out for tsp on my last paycheck will go over the 16500 max for the year by $10....so my question is....will $1270 be taken out the last paycheck for the year or will whatever is left over to meet the max of 16500 will be automatically get taken out? which in my case will be $1260 for the last paycheck....or do I have to change it myself so I dont go over the 16500 tsp max...thanks!

Welcome !!!

And, I would go with $1,269 so you won't go over the limit...

 

[tsptalk]

Welcome NewHire!

 

[NewHire11]

Whatever you specify will be taken out either by percentage or fixed dollars. I put in max every year and every paycheck $634. When you specify a dollar amount you can adjust. I shoot for under, I have other investments like Roth IRA and stocks to invest.

ok....but if i specify 1270 a paycheck...by the time its time for me to get my last paycheck, taking 1270 out for tsp on my last paycheck will go over the 16500 max for the year by $10....so my question is....will $1270 be taken out the last paycheck for the year or will whatever is left over to meet the max of 16500 will be automatically get taken out? which in my case will be $1260 for the last paycheck....or do I have to change it myself so I dont go over the 16500 tsp max...thanks!

 

[Frixxxx]

Thanks for your replies!!!! Unfortunately my fed contractor didnt have a 401k plan...which another reason why I am so greatful to finally land a job with the VA!

So with exactly 13 pay periods left....its seems like I would need to put away 16500/13 = $1270 away a pay period! yikes!

another question i have....if i put away 1270 a pay period until the end of the year....will only $1260 be taken out the last pay period automatically to meet the max tsp contribution for the year?

Whatever you specify will be taken out either by percentage or fixed dollars. I put in max every year and every paycheck $634. When you specify a dollar amount you can adjust. I shoot for under, I have other investments like Roth IRA and stocks to invest.