Temporary Boost in Contribution?

[Atarrin]

Can biweekly contributions to TSP be temporarily made to be above the maximum contribution (16.5k annually) for a biweekly period?

What I'm saying is, normally (16,500/26=$634.61) is the most you could contribute per pay period to not go over. But, if I believed the C fund was undervalued, for example, could I instead change my TSP contribution to $1200 for that pay period, assuming I have the funds in my paycheck to do so, and also pay for other required expenses (taxes, FEHB, etc.)?

Of course I would later have to make sure I did not go over.

 

[RealMoneyIssues]

Welcome to the forum !! Tons to learn here !!

I would answer this question (I think you are correct), but we military folks only get one contribution a month and DFAS isn't the fastest responder...

 

[jpcavin]

Can biweekly contributions to TSP be temporarily made to be above the maximum contribution (16.5k annually) for a biweekly period?

What I'm saying is, normally (16,500/26=$634.61) is the most you could contribute per pay period to not go over. But, if I believed the C fund was undervalued, for example, could I instead change my TSP contribution to $1200 for that pay period, assuming I have the funds in my paycheck to do so, and also pay for other required expenses (taxes, FEHB, etc.)?

Of course I would later have to make sure I did not go over.

You can contribute whatever you want as long as you don't exceed the annual maximum. Assuming you make over $16,500 a pay period, you can dump the whole thing into TSP....provided there is still enough left for other deductions (i.e. health insurance, etc)

 

[Frixxxx]

Can biweekly contributions to TSP be temporarily made to be above the maximum contribution (16.5k annually) for a biweekly period?

What I'm saying is, normally (16,500/26=$634.61) is the most you could contribute per pay period to not go over. But, if I believed the C fund was undervalued, for example, could I instead change my TSP contribution to $1200 for that pay period, assuming I have the funds in my paycheck to do so, and also pay for other required expenses (taxes, FEHB, etc.)?

Of course I would later have to make sure I did not go over.

Once you deposit, the funds are locked. If you go over, you don't get the tax deferment.
EX:
You change a pay period to put in $1200 instead of $634.61 makes $565.39 that you have to deal with by the end of the year. If you reach 16,500 before the end of the year, you may lose the matching contribution:
https://www.tsp.gov/planningtools/electivecontributions/electiveContributions.shtml
So you need to be careful not to hit 16,500, until your last pay check for the year. You also need to make sure that there aren't extra pay periods in the year as well. I meet with my finance office to determine the actual number of pay periods so I can set a specific dollar amount each new calendar year to ensure I get maximum agency matching without going over.

Good Luck and Welcome!

 

[alevin]

Yes, that extra pp threw me off last year-dangnab it. thought I had it figured almost to the penny, even ran the calculator about which pp I was dealing with for changing levels of contributions-I almost made it to 16500 last year but still miscalculated that last pp somehow, still not quite sure how it happened.

So it also threw me off for starting pp of this year for maxing contribs %634/pp, and putting in catchup contribs for first time too-I ended up starting a pp late on max contribs this year thanks to the miscalc as to when last years contribs ended. so I'll have to make it up at end of this year to make sure I max out and make the 16500 to ensure I don't get nailed for making catchups w/out making sure I maxed out the 16.5K too.

 

[jpcavin]

Forgot that the agency matching could put you over the limit. Sorry.:embarrest:

 

[Frixxxx]

Forgot that the agency matching could put you over the limit. Sorry.:embarrest:

Actually, they don't affect your tax liability or the limit.
From TSP:
Like Agency Automatic (1%) Contributions, matching contributions are not taken out of your pay. They also do not decrease the dollar amount of your pay for income tax purposes. Combined with the Agency Automatic (1%) Contribution, they can add as much as 5% of basic pay per pay period to your TSP account.

 

[jpcavin]

Actually, they don't affect your tax liability or the limit.
From TSP:
Like Agency Automatic (1%) Contributions, matching contributions are not taken out of your pay. They also do not decrease the dollar amount of your pay for income tax purposes. Combined with the Agency Automatic (1%) Contribution, they can add as much as 5% of basic pay per pay period to your TSP account.

So $16,500 can be entirely from my own contribution? So in essence, with the agency matching, the total can be more then the IRS max of $16500?

 

[Frixxxx]

So $16,500 can be entirely from my own contribution? So in essence, with the agency matching, the total can be more then the IRS max of $16500?

Correct, Last year I maxed @16,500 + agency matching 5%. Over $22K in all!

 

[jpcavin]

Correct, Last year I maxed @16,500 + agency matching 5%. Over $22K in all!

Didn't know that. Time to increase my ccontribution!
Thanks Frixxxx!

+1

 

[Frixxxx]

Didn't know that. Time to increase my ccontribution!
Thanks Frixxxx!

+1

That's the spirit!

 

[Atarrin]

Thanks for all of the replies. I have been lurking for a couple of weeks now and trying to learn my stuff.

I'm a relatively new hire (< 1 year) who is trying to put as much in TSP now as possible.

If you don't mind a bit of a topic shift, what's so wrong with the L Funds? I know there's a big debate here about "Buy and Hold" vs. Market "Timers" but this seems to go beyond that.

 

[Frixxxx]

Thanks for all of the replies. I have been lurking for a couple of weeks now and trying to learn my stuff.

I'm a relatively new hire (< 1 year) who is trying to put as much in TSP now as possible.

If you don't mind a bit of a topic shift, what's so wrong with the L Funds? I know there's a big debate here about "Buy and Hold" vs. Market "Timers" but this seems to go beyond that.

Basically, L funds are risk management funds that use a time based positioning system to determine market allocation. The real scare here is because it is time based, the allocations can be detrimental to your money because the allocations could "lock in losses" when the market is swinging.....can you imagine taking a 2% hit and then because the fund says, Oh, Its an allocation day, and I need to move money to bonds, and that 2% loss gets locked in on your money?:blink:

That's why the L funds scare those who are more actively trading!

But if you actively trade, some use L funds to hedge a Lilly pad position (G Fund)!