Thread: great tsp info link!

Hey Tekno, that is a good site! (I just found my way to this particular forum.) A question we have around my office is, what is the future of 2006's $15000 limit? Catch-up contributions are going to escalate but is the $15000 going to remain fixed?

In 2006 I plan to switch to the dollar-figure as opposed to the percentage figure. Then I will throw in max catch-up as I am over 50. It looks like over $24000 in contributionsfor me next year, including agency match. Yipes!

Dave

Dave M,

Welcome to the discount movie tickets group. I like saving a few dollars when I go to the big screens.

However, your Uncle is not magnanimous. To help answer some of your questions. even though you didn't ask me directly, I'm available with a few tips.

In 2006 the max is 15,000$ plus 5000$ for the catch up. In 2007 the max remains the same, only goinf forward the amout will then be indexed to inflation at least through 2010. The catchup remains at 5000$ through 2010.

IRA limits are 4000$ for 2005, 2006, 2007. The max jumps to 5000$ in2008, remains at 5000$ for 2009 and then becomes indexed to inflation through 2010. The IRA catchup is currently 500$, moves to 1000$ in 2006 and remains at that level through 2010.

What a great way to dollar cost average-especially in the C fund. Dennis

Dave M wrote:

In 2006 I plan to switch to the dollar-figure as opposed to the percentage figure. Then I will throw in max catch-up as I am over 50. It looks like over $24000 in contributionsfor me next year, including agency match. Yipes!

Dave

Isn't that great? For tax purposes, if you do nothing and you are earning $50k per year, Uncle Sam will take away $9316 (single) and $6804 (married filing jointly). However, because you are smart enough to try to save as much (not too many people can do what you plan to do), Uncle Sam can only take away $4316 (single0 and $3804 (married filing jointly). Just by socking your savings in TSP, you were able to save $5K and/or $3k respectively (please see publication 17). This is more money in your pocket. Include this with agency match plus your ROTH IRA contribution, you are on your way to better retirement.

Pyriel

Birch trees and aspens are lovely in the fall.

Dennis I think you have it backwards. The chart at TSP.gov (and reproduced at the Tekno-site) has the asterisks on the 5k catch-up, indicating this figure will be indexed. The 15k figure is set by the IRS, end of statement. My question is, what is the future of the 15k?

By great good fortune having nothing to do with me, I have lucked into some nice pay raises lately. ALL of it has gone into the TSP, over $600 per pay period, just out of my check, these days. Since my daughter is set to graduate from college soon -- Master's degree, just like her Dad, what a girl! -- I will have an additional 10K per year in my pocket after tuition expenses cease. I'll let that be my raise since it is already tax-paid as it were, and put all my COLA's and step-increases into the TSP too! So I want that 15k to get bigger, say 3-5% per year. See what I'm saying? (If she wants a PhD she is going to have to get a fellowship, heh. There are limits.)

Dave

Dave M,

I invest backwards so I really wouldn't be surprised. However looking at a published graph from Money Magazine it shows the $15000 limit is indexed to inflation in 2007. The IRA limit of $5000 is indexed to inflation starting in 2009. If you anticipate a heathly inflation up through 2010 you will get extra funds to apply to TSP. If there is minimal inflation then do as they do in Key West-be happy, don't worry. But don't stay in that shelter to long. Dennis

Dave M wrote:

Hey Tekno, that is a good site! (I just found my way to this particular forum.) A question we have around my office is, what is the future of 2006's $15000 limit? Catch-up contributions are going to escalate but is the $15000 going to remain fixed?

In 2006 I plan to switch to the dollar-figure as opposed to the percentage figure. Then I will throw in max catch-up as I am over 50. It looks like over $24000 in contributionsfor me next year, including agency match. Yipes!

Dave

IRS limits should be lifted to stimulate investment no ? about it!

use the fixed dollar amount....for FERS folks do not go over the IRS limit