FEDweek

FERS Investors Should Guard against Hitting TSP Limit Too Soon

Time is running short for FERS employees to make any adjustments needed in ongoing investments if they are on an investing schedule to hit the regular investment limit of $18,000 too soon. To get the maximum government contributions, FERS participants need to structure their investments so that they are putting in at least 5 percent of salary in each pay period of the year; in some cases, they may need to cut back on their biweekly investment amounts. If there is any question, they should check with their payroll offices how many TSP investment dates (which are not necessarily the same as pay distribution dates) are left for them in the year, and adjust accordingly. If they hit the limit before the last pay period, they can no longer invest until next year, and agency matching contributions worth up to 4 percent of salary cut off too, and can’t be recouped (the automatic 1 percent of salary agency contributions would continue, though). That is not an issue for CSRS investors, who get no government contributions.