Maximizing TSP matching


Q. I’m FERS and will be retiring in January as soon as we get 100 percent credit for sick leave. I anticipate two checks coming in.

If I were to put as much as possible into my Thrift Savings Plan — let’s say I was able to put in $16,000 over the two pay periods — how does the government match this? Is it per pay period or the amount I contribute?  What is the consensus to get the most in a short period of time?

If I put in all available funds, after deductions, and it is considered pretax, can I avoid being federally taxed, or is the amount into TSP pretax calculated after it is first federally taxed by the National Finance Center? I’m looking for ways to reduce my tax burden and make the most of government matching funds.

A. The matching is maxed out when you have contributed 5 percent of your pay for the pay period. The way to maximize the match is to contribute 5 percent of you pay for as many pay periods as possible. This is a matter of fact, not consensus.

Your TSP contributions from pay are pretax. That means they are not subject to income tax — federal or state — until they are later withdrawn.

In the case where you only have two pay periods to work with, and those pay periods are in the same tax year, you’ll minimize your current tax burden and maximize your matching by contributing as much as possible, split evenly between the two periods.


About Author

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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