New VA employee from Chicago!!!

[NewHire11]

Hello all,

I will be starting my new job as a pharmacist with the VA starting on Tuesday. Previously I have been working for the VA as a federal contractor for the past year and half...so this is a very exciting time for me!!!

I can't wait to contribute to my TSP but I have very limited knowledge of the stock market or investing.

I'm 33 and plan on being with the VA for around the next 30 years....a couple of questions? Is it still possible to maximize my TSP this year even though I am hired mid year and also placing my funds into the L2050 a good start? I plan on keeping my money there until I gain more knowledge about investing.

Any pointers or tips would be much appreciated!!! thanks!

 

[ArchAngel]

Welcome from the Walla Walla, WA VAMC!

 

[nnuut]

Welcome to the Message Board Newhire11!!! Plenty of info here, just participate and it will come.
Best of luck
Norman

 

[Sensei]

Welcome - I also have close to 30 years of contributions ahead of me. And, like you, I parked in the L2040 (L2050 wasn't around yet) until I knew enough to feel comfortable making my own decisions with my money.

I know there's some way to make "catch up" contributions, but I've never done it. However, if you receive matching contributions from your employer, be sure you don't hit the max before the end of the year, otherwise their contributions stop. (At least, that's what I was informed)

Good luck, and see you around!

 

[Frixxxx]

...
I'm 33 and plan on being with the VA for around the next 30 years....a couple of questions? Is it still possible to maximize my TSP this year even though I am hired mid year and also placing my funds into the L2050 a good start? I plan on keeping my money there until I gain more knowledge about investing.

Any pointers or tips would be much appreciated!!! thanks!

Welcome NewHire11,

TSP contributions are related to tax deferment. Take 16,500 minus 401K earnings from contract job and that's how much you can put into TSP (401G) for the remainder of the year.

Ex
16,500 (IRS Limit)
6,500 (401K)
10,000 (TSP)
Divide 10,000 by number of pay periods and that will be how you can still max out your contributions.
If that is too much, just make sure to get the matching 5% for 5% of your pay....

Good Luck and Good Investing!

 

[NewHire11]

Welcome NewHire11,

TSP contributions are related to tax deferment. Take 16,500 minus 401K earnings from contract job and that's how much you can put into TSP (401G) for the remainder of the year.

Ex
16,500 (IRS Limit)
6,500 (401K)
10,000 (TSP)
Divide 10,000 by number of pay periods and that will be how you can still max out your contributions.
If that is too much, just make sure to get the matching 5% for 5% of your pay....

Good Luck and Good Investing!

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?

 

[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.

 

[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!

 

[tsptalk]

Welcome NewHire!

 

[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...

 

[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.

 

[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.

 

[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...

 

[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.

 

[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:

 

[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%

 

[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...

 

[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]

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]

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?