New VA employee from Chicago!!!

[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!

 

[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.

 

[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

 

[nnuut]

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

 

[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."

 

[nasa1974]

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

Me too.