YAY! My first deployment 'money fight' with wife - over TSP!

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I am fortunate that I am deployed and single so the only person I have to convince of my financial plan is myself.

I am in agreement with your plan and I am doing the same thing.

First my TSP contributions are maxed out at 10% of my base pay and 100% of my special and incentive pay. This allows me to contribute over twice what I could contribute if I was not deployed.

Then any extra money I had was going towards the SDP (Savings Deposit Program, a savings account for deployed service members that returns 10% interest annually, compounded quarterly.) which I have already maxed out since I have no debts that have an interest rate higher than 10%.

I have no desire to rush paying off my mortgage or my student loans as those rates are low and give me tax breaks. I am currently settling the little dept that I acquired while taking care of some things before deployment and going to max out a Roth IRA. After I do that I will then make accelerated payments on my non-tax deductable interest debts. It also helps that my house is currently being rented out for a substantial amout higher than what my mortgage payment is.

But the way to bring your wife on board is to communicate it to her and show her the numbers. You must remain calm and address all of her concerns. If you don't know the answer to a question of hers you must do your best to find the answer to that question. I'm certain that if you show her the numbers and have a lot of patience she will see that the numbers do not lie.

Just to clarify some misconceptions that I've seen in responses. The max of base pay that military members can contribute is 10%, not 15% like civillian employees. There are no matching funds for military members. I say again, no matching funds for military members. I don't understand why the military doesn't march on Washington to get this fixed. I have already received a response from my representative Bob Goodlatte in which he doesn't address the problem, but just passes the blame. I don't see how this can be viewed as anything other than discrimination against military members. So once I have an opportunity to find the time from fighting this war, he is going to receive a very spirited letter from me.
 
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sheasljj wrote:
Just to clarify some misconceptions that I've seen in responses. The max of base pay that military members can contribute is 10%, not 15% like civillian employees. There are no matching funds for military members. I say again, no matching funds for military members. I don't understand why the military doesn't march on Washington to get this fixed. I have already received a response from my representative Bob Goodlatte in which he doesn't address the problem, but just passes the blame. I don't see how this can be viewed as anything other than discrimination against military members. So once I have an opportunity to find the time from fighting this war, he is going to receive a very spirited letter from me.
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Great advice...

I went over the responses but could not find your finding about posters putting in 15% max is allowed for the military members. Can you please point that out to me. I thought our posters were all correct with what advice they were giving out... Could it be that you've mistaken the 15K TSP max for next year to be 15%, instead?

P
 
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All TSP participants can do $15000 next year to include the military folks. This also includes the catch up provisions for the salty dogs that stayed around instead of opting for the 20 year defined benefit plan.
 
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pyriel wrote:
I tried it again and it is doing the same. I opened it with my computer just to check and it was fine. I put it in a diskette and went to another computer and again it was fine. I think something in the system here is messing it up.

Tom,,,, HELP!!!!
Click to expand...
I'll try downloading my excel worksheet one more time...
 
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pyriel wrote:
sheasljj wrote:
Just to clarify some misconceptions that I've seen in responses. The max of base pay that military members can contribute is 10%, not 15% like civillian employees. There are no matching funds for military members. I say again, no matching funds for military members. I don't understand why the military doesn't march on Washington to get this fixed. I have already received a response from my representative Bob Goodlatte in which he doesn't address the problem, but just passes the blame. I don't see how this can be viewed as anything other than discrimination against military members. So once I have an opportunity to find the time from fighting this war, he is going to receive a very spirited letter from me.
Click to expand...
Great advice...

I went over the responses but could not find your finding about posters putting in 15% max is allowed for the military members. Can you please point that out to me. I thought our posters were all correct with what advice they were giving out... Could it be that you've mistaken the 15K TSP max for next year to be 15%, instead?

P
Click to expand...



I was under the impression that civillian employees can contribute up to 15% of their pay to the TSP. I could easily be mistaken on this as I know less about the civillian side of the TSP as it doesn't concern me as much as the military side.

I see now that FERS can contribute up to 14% and get matching contributions. And CSRS can contribute up to 9% and get no matching contributions.
 
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Grandma just gave me an idea on how i can post the worksheet i made for TSP2tide... Now, readers have to go back to my original post.. Too bad, I can't edit or delete within this section...:X














STARTED AT AGE 35
STARTED AT AGE 37

age
yearly investment
8%
total
age
yearly investment
8%
total

35
$15,000.00
1200
$16,200.00
35




36
$15,000.00
$2,496.00
$33,696.00
36




37
$15,000.00
$3,895.68
$52,591.68
37
$15,000.00
1200
$16,200.00

38
$15,000.00
$5,407.33
$72,999.01
38
$15,000.00
$2,496.00
$33,696.00

39
$15,000.00
$7,039.92
$95,038.94
39
$15,000.00
$3,895.68
$52,591.68

40
$15,000.00
$8,803.11
$118,842.05
40
$15,000.00
$5,407.33
$72,999.01

41
$15,000.00
$10,707.36
$144,549.41
41
$15,000.00
$7,039.92
$95,038.94

42
$15,000.00
$12,763.95
$172,313.37
42
$15,000.00
$8,803.11
$118,842.05

43
$15,000.00
$14,985.07
$202,298.44
43
$15,000.00
$10,707.36
$144,549.41

44
$15,000.00
$17,383.87
$234,682.31
44
$15,000.00
$12,763.95
$172,313.37

45
$15,000.00
$19,974.58
$269,656.90
45
$15,000.00
$14,985.07
$202,298.44

46
$15,000.00
$22,772.55
$307,429.45
46
$15,000.00
$17,383.87
$234,682.31

47
$15,000.00
$25,794.36
$348,223.80
47
$15,000.00
$19,974.58
$269,656.90

48
$15,000.00
$29,057.90
$392,281.71
48
$15,000.00
$22,772.55
$307,429.45

49
$15,000.00
$32,582.54
$439,864.25
49
$15,000.00
$25,794.36
$348,223.80

50
$15,000.00
$36,389.14
$491,253.39
50
$15,000.00
$29,057.90
$392,281.71

51
$15,000.00
$40,500.27
$546,753.66
51
$15,000.00
$32,582.54
$439,864.25

52
$15,000.00
$44,940.29
$606,693.95
52
$15,000.00
$36,389.14
$491,253.39

53
$15,000.00
$49,735.52
$671,429.46
53
$15,000.00
$40,500.27
$546,753.66

54
$15,000.00
$54,914.36
$741,343.82
54
$15,000.00
$44,940.29
$606,693.95

55
$15,000.00
$60,507.51
$816,851.33
55
$15,000.00
$49,735.52
$671,429.46

56
$15,000.00
$66,548.11
$898,399.43
56
$15,000.00
$54,914.36
$741,343.82

57
$15,000.00
$73,071.95
$986,471.39
57
$15,000.00
$60,507.51
$816,851.33

58
$15,000.00
$80,117.71
$1,081,589.10
58
$15,000.00
$66,548.11
$898,399.43

59
$15,000.00
$87,727.13
$1,184,316.23
59
$15,000.00
$73,071.95
$986,471.39

60
$15,000.00
$95,945.30
$1,295,261.53
60
$15,000.00
$80,117.71
$1,081,589.10










***DIFFERENCE OF $213,675.00
 
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Oh no... I totally messed this up. Can someone just please clean up my mess. Please......
 
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Birchtree wrote:
All TSP participants can do $15000 next year to include the military folks. This also includes the catch up provisions for the salty dogs that stayed around instead of opting for the 20 year defined benefit plan.
Click to expand...
Next year I will have to contribute $1250/month of my own money to max out at $15,000.

A FERS employee who makes as much as I do including BAS and BAH only has to contribute $1013.81/month of their own money to max out at $15,000 since they get 5% matching contributions. Which works out to be about $2834.52 in matching contributions over the year.
 
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sheasljj wrote:
Birchtree wrote:
All TSP participants can do $15000 next year to include the military folks. This also includes the catch up provisions for the salty dogs that stayed around instead of opting for the 20 year defined benefit plan.
Click to expand...
Next year I will have to contribute $1250/month of my own money to max out at $15,000.

A FERS employee who makes as much as I do including BAS and BAH only has to contribute $1013.81/month of their own money to max out at $15,000 since they get 5% matching contributions. Which works out to be about $2834.52 in matching contributions over the year.
Click to expand...
Hmmmm.... I believe you don't include the 5% matching from your employer since that is not pretax dollar on your end. You still need to do the $1250 to max out. :^
 
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Pyriel,

So what you are saying that a FERS employee can still contribute $1250/month to max out their contributions for the year at $15,000 and still get 5% matching funds to put them over $15,000 for the year. So in the case of a FERS employee who was compensated at a similar level that I currently am they would have been able tocontribute $17,834.52 with matching contributions over the year where I can only contribute $15,000 since I don't receive matching funds?
 
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Sheasijj,

For FERS it is 15% + 5% matching up to 15k. 15K is the max limit regardless of civilian or military.As you pointed out the 5% matching is the difference.
 
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Here is additional information straight from the TSP Web site:




[align=left]What's New




Current Information
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[/align]

This page was updated on June 8, 2005.


[align=left]Open season dates: April 15 through June 30. (After this, open seasons are eliminated.)

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IRS FERS employees for 2005: 15% (up to the IRS limit)

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TSP contribution limit for CSRS employees for 2005:10% (up to the IRS limit)

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TSP contribution limit for members of the uniformed services for 2005: 10% (up to the IRS limit)

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An updated version of the Fact Sheet, Annual Limit on Elective Deferrals, is now available in Forms & Publications on this Web site.[/align]

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If you are age 50 or older and you are already contributing the maximum amount of regular TSP contributions for which you are eligible, you may elect to make up to $4,000 in catch-up contributions for 2005. You must make a new election each calendar year. (This limit changes annually.)
Civilians should use Form TSP-1-C, Catch-Up Contribution Election; members of the uniformed services should use Form TSP-U-1-C. For more information, see the Fact Sheet, "Catch-Up Contributions."
 
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One more Straight from TSP For Uniformed Services:





Under the law that extended the TSP to the uniformed services, the secretary responsible for each service may designate critical specialties for matching contributions. Members serving in those specialties who agree to serve on active duty for 6 years may be eligible for matching contributions during the 6-year active duty obligation.

The matching contributions apply only to amounts contributed from basic pay and not from any incentive pay or special pay. If you do not contribute basic pay to the TSP, you will not be eligible to receive matching contributions. Matching contributions apply to the first 5 percent of pay that you contribute each pay period. Your contributions are matched dollar-for-dollar on the first 3 percent of pay you contribute each pay period and 50 cents on the dollar for the next 2 percent of pay.

As of the date of this Web edition, matching contributions had not been authorized by any of the uniformed services. Your service will notify you if you are eligible to receive matching contributions.



 
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That's the story. I contribute 15% of my base salary plus $4000 in over-50 catch-up money plus the govt kicks in 5%. It works out to about 25% of my base pay is going into the TSP this year.

I'm very sorry to hear military is capped at 10% and gets no matching -- why not? That means you should probably be more aggressive with your allocations, whereas I can afford to be pretty conservative and still make my goal.

Dave
 
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GALLO1 wrote:
Sheasijj,

For FERS it is 15% + 5% matching up to 15k. 15K is the max limit regardless of civilian or military.As you pointed out the 5% matching is the difference.
Click to expand...
Hmmm... How do I word this without confusing anyone? TSP is unlimited. The one that set the limit is the IRS. Because your contribution will become tax deferred and will definitely lower down your income (for your W2), they set the limit to 15K. 5% matching from employers is not part of employers base pay. Hence it is not subject to 15K limit that the IRS is limiting. It only makes sense not to include the matching contribution because as of today, FERS employees may contribute 15% with 5% matching. With the matching contribution from the employers, they are now going over the 15% limit set by the TSP.
 
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Pyriel and Gallo1 are giving conflicting information. Either a FERS employee can exceed the $15,000 limit or they can't.

DaveM, next year the 10% limit goes away and I could contribute up to 100% of my base pay, but am still limited to $15,000/year. Still no matching contributions. While the military can get matching contributions, as you can read above they've never been authorized and if they were it would affect very few people.
 
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I'm a little confused now. :shock:My LES says 15% TSP, Gov will match up to 5%.

IRS Limit is 15k.

I thought that I'd read somewhere if I go over the IRS 15k limit then I could lose matching funds.

I guess that's why I usually read and I don't comment. Let me think about this.
 
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The way I understand it. I hope this is understandable.

Current year the max FERS employee can contribute to TSP is 15% up to the IRS limit of $15,000. The 5% matching does not count towards either of these limits.

If you make $100,000/year your 15% TSP will hit the $15,000/year IRS limit. No problem.

If you make more than $100,000/year your TSP contributions would stop Nov/Dec timeframe since you hit the IRS limit. At that point your matching funds would also stop since you are not contributing to TSP. If over 50 years of age, catch up also comes into play.
 
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Aggie76 wrote:
The way I understand it. I hope this is understandable.

Current year the max FERS employee can contribute to TSP is 15% up to the IRS limit of $15,000. The 5% matching does not count towards either of these limits.

If you make $100,000/year your 15% TSP will hit the $15,000/year IRS limit. No problem.

If you make more than $100,000/year your TSP contributions would stop Nov/Dec timeframe since you hit the IRS limit. At that point your matching funds would also stop since you are not contributing to TSP. If over 50 years of age, catch up also comes into play.
Click to expand...
Wrong........The IRS limit for 2005 is $14,000 + $4000 Catchup. In 2006 that IRS limit goes up to $15000 + $5000 catch-up with no TSP percentage limits. The way to avoid the year-end problem is to specify a dollar amount ($14,000/26=$539) to contribute per pay period, instead of a percentage........That way you max out the matching contributions, since the limit is not reached until the last pay period of the year.

So for next year allocate $15,000/26=$577 To TSP per pay period + $5000/26=$192 catch-up, if applicable. That way you will get the entire matching funds, which is 5% of your annual salary.

This is all explained in detail on the TSP website.
 
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Aggie76, Your explanation is crystal clear, and Dogdaddy, that's correct 14,000 this year.

For anyone that wants to check out more on this topic:

Go to TSP home page, click on What's New, click on Current Information, and then click on, Annual Limit on Elective Deferrals. This is where I read the details on possibly losing matching funds if over the IRS limit.

Sheasljj, you are correct that very few if any uniformed service people get the matching funds.
 
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