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Thread: 2020 TSP Contribution Limits Adjustments

  1. #1

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    Default 2020 TSP Contribution Limits Adjustments

    From TSP last night:


    2020 Contribution limits



    The Internal Revenue Code places specific limits on the amount that you can contribute to employer-sponsored plans like the TSP each year.
    The limits for 2020 have been announced. To learn more, visit "Contribution Limits."



    Details:

    Contribution Limits



    Resources


    Calculators:





    Publications:





    Forms:

    U = Uniformed Services





    Don't miss out on matching contributions.
    If you are a FERS or BRS participant and your contributions reach the IRS elective deferral limit before the last pay date of the year, you will not receive all of the matching contributions to which you would otherwise be entitled. Use the calculator, How much can I contribute? to ensure that you don't leave any money on the table.



    The Internal Revenue Code (IRC) places limits on the dollar amount of contributions you can make to the TSP. The Internal Revenue Service (IRS) calculates them every year and they can change annually. The TSP announces the limits on the TSP website and the ThriftLine as well as through its various publications when the limits become available.
    Elective Deferral Limit $19,500

    (Up $500 from 2019)
    IRC §402(g) Applies to combined total of traditional and Roth contributions. For members of the uniformed services, it includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay, and bonus pay, but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone.
    Annual Addition Limit $57,000

    (Up $1,000 from 2019)
    IRC §415(c) An additional limit imposed on the total amount of all contributions made on behalf of an employee in a calendar year. This limit is per employer and includes employee contributions (tax-deferred, after-tax, and tax-exempt), Agency/Service Automatic (1%) Contributions, and Matching Contributions. For 415(c) purposes, working for multiple Federal agencies or services in the same year is considered having one employer.
    Catch-up Contribution Limit $6,500 (Up $500 from 2019) IRC §414(v) The maximum amount of catch-up contributions that can be contributed in a given year by participants age 50 and older. It is separate from the elective deferral and annual addition limit imposed on regular employee contributions.
    If you are a member of the uniformed services, you should know that Roth contributions are subject to the elective deferral limit ($19,500 for 2020) even if they are contributed from tax-exempt pay. If you want to contribute tax-exempt pay toward the annual additions limit, you will have to elect traditional contributions for any amount over the elective deferral limit.
    In addition, if you are eligible to make catch-up contributions and you are deployed to a designated combat zone, you will not be able to make any traditional catch-up contributions from your tax-exempt pay. However, Roth catch-up contributions from tax-exempt pay are allowed.
    If you are a member of the Ready Reserve and you are contributing to both a uniformed services and a civilian TSP account the elective deferral and catch-up contribution limits apply to the total amount of employee contributions you make in a calendar year to both accounts.
    If you are called to active duty and make tax-exempt contributions to the TSP while deployed in a designated combat zone, the sum of the employee and agency contributions to your civilian account as well as the tax-exempt contributions made to your uniformed services account cannot exceed the annual addition limit.




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  3. #2

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    Default Re: 2020 TSP Contribution Limits Adjustments

    Somebody double check what I am thinking, and let me know if I am doing something wrong:


    1. I am now adjusting the amount deducted from my paycheck. In the past, I have ALWAYS used a fixed percentage, and aimed for just below the max before the end of the year, so that I never went over, and never had that last pay period screwed up on the matching funds.

    2. This year, however, is my last year for sure until retirement, and I am setting myself up for the year. I THINK I am going to retire before the end of the year. But just in case,, I am PLANNING to try and hit as close to the $19,500 limit, PLUS I am planning on making, for the first time ever, a small "catch-up contribution".

    So tell me if this sounds right, or if I am missing something.

    1. I am changing my TSP traditional contribution from "9% of pay" to a fixed $450 per pay period this year.

    2. I am changing my TSP ROTH from "5% of pay" to "$300 per pay period".

    That way I get right up to the $19,500 limit.

    In addition, I am going to contribute BOTH $100 "catch-up" to traditional, and $100 "catch up" to ROTH, thereby adding to both.

    It's now PAY PERIOD 2, so I will only be one-pay period slightly less that the max, if that's what it ends up being for the year.

    Do I sound like I haven't screwed anything up, and not accidentally went over someplace?

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  5. #3

    Default Re: 2020 TSP Contribution Limits Adjustments

    Can you just reassess and make adjustments in October or November if you've miscalculated?

    By the way, you have some very nice problems, you've done things right over the years, and your retirement will be great!

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  7. #4

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    Default Re: 2020 TSP Contribution Limits Adjustments

    Sounds good. Just remember 2020 is a leap year.
    May the force be with us.

  8.  
  9. #5

    Default Re: 2020 TSP Contribution Limits Adjustments

    Well, your regular contributions add up to $750/pp which would max you out in 26 pps. The only problem I see is that you say you will be 1 pp short so you won't max out your regular contributions. If you don't max out your regular contributions by the end of the year the government will return your catch-up contributions in your last pay check of the year. That's what I've been told. You have to max out your regular contribution in order to have catch-up contributions.


    They supposedly are going to change that next year so there is only one contribution with an increased limit at age 50 like is done with IRAs. That doesn't help you now though.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2022
    Past Returns:
    2019 27.97%, 2018 -3.36%, 2017 13.10%, 2016 -1.79%, 2015 8.71%,5Yr Avg 8.35%

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  11. #6

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    Default Re: 2020 TSP Contribution Limits Adjustments

    Quote Originally Posted by nasa1974 View Post
    Sounds good. Just remember 2020 is a leap year.
    Damn right it is! if all goes well, I'm going to retire, and I'm goinjg to be LEAPING then!

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  13. #7

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    Default Re: 2020 TSP Contribution Limits Adjustments

    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

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