Guard Against Hitting TSP Dollar Cap

By: fedweek

This time of year is a good point for higher-paid FERS employees to check to make sure they won’t lose government contributions due to hitting the annual investment dollar cap too early. The annual TSP investment dollar cap this year is $15,500. Since the lifting of the old percentage limits on investing, some employees have chosen to invest at high rates early in the year in order to get their money in the TSP sooner and take advantage of potential tax-advantaged growth for longer periods—that is, “front-loading” their investments. FERS employees who have been doing so especially might need to examine their situation around now. FERS investors should take care to structure their investments so that they can continue investing at least 5 percent of salary—the amount that produces the maximum government contribution–through every pay period of this year. There is no similar consideration for CSRS investors, who get no government contributions.