Q. I’ll be receiving a check this week or next from an inheritance. I’m not maxed out on my TSP and haven’t sent any catch-up money in this year either. I was wondering if I could send 100 percent of my pay for the last couple of pay periods this year to TSP to get as much in there before the end of the year as possible? Then next year I’ll start putting in the maximum along with catch-up. A. Your TSP contributions must come from payroll deferral or, you may transfer eligible money into your TSP account from an…
Browsing: catch-up contributions
Q. I see that 2012 will have 27 pay periods. In current and previous years I divide the maximum allowable TSP and catch-up contributions by 26 to calculate my payroll deductions. Is the process the same in 2012, but divide by 27? Or should I stick with 26 pay periods because 2012 will run to Jan. 12, 2013 and so pay period 27 will be in both tax years 2012 and 2013? A. Pay and reporting schedules are agency-specific, so you’ll have to ask your payroll or HR officer this question.
Q: I wanted to have my house paid off by the time I retire in 2025. I am over 50, and the yearly payment needed to pay off my house would equal my Thrift Savings Plan catch-up contribution; I can’t do both. Would you recommend paying off the house or paying more into the TSP account? A: It depends upon your assumptions about the future and your circumstances. With what little I know about you (virtually nothing), I can only recommend that you carefully consider keeping the mortgage and making the TSP contributions.
Q: I have always heard/read that to live at the same standard in retirement, you would need to have approximately 80 percent of your salary when you retire. Although I think I know the answer to my question, I would like to hear your response. My question is: Is it the annual gross pay minus my TSP contribution that I take home to live on, or my annual gross pay before I take out the TSP contribution that one would use for the 80 percent calculation? For example, I am over 50, so I take out the maximum $16,500 plus…
Q: I like to make plans for my savings and would like to know whether the contribution limits will be increasing for the Thrift Savings Plan and the TSP Catch-up contribution plan for 2011 and 2012. A: The limits are indexed to inflation, and we won’t know whether they’ll be increasing until the inflation figures are in.
Q: After contributing $22,000, including age 50 catch-up contributions, in calendar year 2009, may I also contribute $6,000 to a traditional (nondeductable) IRA, which includes the standard $5,000 plus $1,000 age 50 catch-up? A: Your participation in the Thrift Savings Plan should not prohibit you from making the maximum nondeductible contributions to a traditional IRA in 2009.