Increasing TSP contributions before retirement


Q. My spouse and I are FERS employees and are considering retirement in the second half of 2016. I have 30+ years and meet age requirements. My spouse meets the MRA +10 requirement. In anticipation of retirement and to take advantage of tax considerations, we are considering applying 100 percent of our wages, starting with the first pay period 2016, until we reach 2016 maximum TSP and TSP catch-up limits. During this time we can live off our cash reserves. Is there a down side to using this approach from the perspective of the government matching our TSP contributions? And should we use this approach and decide not to retire in 2016, is there any negative potential tax impact?

A: I don’t see any potential negative tax impact, but that’s really a question for your tax accountant. Since TSP agency matching is based on your wages for each pay period, you will miss out any matching that would otherwise occur during the remainder of the year after you’ve reached the annual contribution limit.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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