Thread: 2006 tsp becomes unlimited?

http://www.tsp.gov/uniserv/features/chapter16.html#sub1

I wonder if they will offer more funds, given the increase in cash to be managed.

There is a new "L" fund coming next year I believe. Called Lifestyles, it will be more of a diversified account of the other funds.

The web site about the new forthcoming funds can be found at http://www.govexec.com/dailyfed/0404/041904d1.htm

In doing some math, I figure when the "unlimited" contributions occur in 2006, one will need to figure their income and "catch-up" plans, since there will be a cap of $20,000.00 There's unlimited then there is unlimited with a twist!:P

tsptalk wrote:

There is a new "L" fund coming next year I believe.

hehehee, "Lahahahoooooser!" immediately popped in my head. Actually, it should be "L" for the "Lazy Fund" for those too lazy to take the time to learn how to be responsible for their own money.

My only problem with it is that we all pay for it and get nothing new. From that article: (thanks for the link, smine)

"For simplicity's sake, for efficiency's sake, the cost of this project is going to be allocated across the plan," he said.

"Efficiency." "Government".

bwah ha hahaaaaa! oh my.

smine wrote:

In doing some math, I figure when the "unlimited" contributions occur in 2006, one will need to figure their income and "catch-up" plans, since there will be a cap of $20,000.00 There's unlimited then there is unlimited with a twist!:P

Smine, don’t forget to consider any matching contributions you might be receiving.

Most of us probably receive some type of matching contributions throughout the year as long as we don’t hit the maximum. If you contribute too much, too fast, you’ll lose out on “free� money. :shock:

Thanks for thinking of us old folks, Zarth! Been there so long that I finally got to 9%; not thinking we're matched at all!

Zarth, Thanks for the info. However, would the rules change for the "free money" on 2006. My wife works for DOD and contributing in FERS. Their admin can't seem to give me a definitive answer on this. Between "free money" vs. lowering tax bill due to maximum contribution, I wonder which one would be better.

Smine, I just had a revelation... Planning for 2006 is a major task for many TSP members who are not very familiarized with the system. Although, we will be allowed to put in 15K (or 20K for some), not too many people will be able to afford them if they are not ready NOW. 15K (if they want to max on contribution) divided 26 pay period is about 577 dollars, and to some that is alot of cash.

Pyriel – Good question on the TSP matching “free money� once we hit 2006. But the way I read it, TSP will cap most of us at 15K from then on…and as long as you don't reach that limitbefore the end of the year, the matching will continue.

BTW, the 1% Agency Automatic Contribution continueswhether you reach the limit or not. (it's independent)

Take a look at this file from the TSP web-site, it might answer a few questions.

http://www.tsp.gov/forms/ocfs91-13.pdf

Agree that $577 give or take is quite a sum. I'm already at the max of 9% then catch up (since I'm over 50!). It's about $385 now. I suppose it all depends on your salary, since we're speaking of percentages. You are right. The deductions can get steep and planning ahead is the thing to do now. I was a little surprised to see how much would come out of each check!