Employees may invest in the TSP by percentage of salary or by dollar amount per pay period. Regular investments continue unless changed year-to-year, meaning that employees making investments based on a percentage of salary will see their investment rates go up automatically effective with the first pay period of the year.
Those wishing to make a maximum investment may have to increase their savings rates, meanwhile, because the maximum dollar limit for regular contributions—called the “elective deferral limit”—has risen from last year’s cap of $17,500 to $18,000. In addition, persons who will be age 50 or older by the end of this year are eligible to make an additional $6,000 “catch-up contribution” investment–up from $5,500 last year–once they already have invested the regular maximum, or if they are on an investing pace to do so by the end of the year.
A new catch-up election must be made each year; those don’t carry over from a prior year. For both limits, the maximum applies to the total of investments made in traditional status, Roth status or both, for those making both types. One additional consideration: effective January 31, a military reservist making investments in a uniformed services TSP account from military pay must designate any Roth investments as a percentage of salary, not as a dollar amount.
