One TSP Investment Limit Rises, One Flat

The investment limit on tax-favored retirement savings plans such as the TSP is rising from $18,000 to $18,500. That’s the cap on regular investments by employees, called the “elective deferral limit.”

For those making investments on a percentage of salary basis, investments will rise automatically with the pay raise–as will agency contributions, for those under FERS.

Those making investments based on a dollar amount per pay period might wish to consider increasing that amount, especially if they are under FERS and would not capture as much of a matching government contribution, which is based on a percentage of salary the employee invests. To get the maximum match, an employee must personally invest at least 5 percent of salary.

The separate limit on “catch-up contributions”–additional investments allowed for those age 50 or older at any time in calendar year 2018–will stay flat at $6,000. Those who made catch-up investments in 2017 must make a new election if they want to make them again in 2018; unlike regular investments, those don’t carry over from year to year.