Active employees who are age 50 or above, or who will be before the end of the year, and who wish to make “catch-up contribution” investments into the TSP still can make those investments before the end of the year, but time is running short.
Catch-ups are allowed if an eligible individual has hit the annual dollar TSP limit ($18,000 this year) or is on an investing pace to do so by the end of the year. The maximum allowable catch-up is $6,000 this year. The investments must be made from payroll withholding, so to take the most advantage of the benefit with only a few pay periods left in the year, investors would have to order a large biweekly withholding, assuming they could live on the reduced income for that period.
Time also is running short for FERS employees to adjust their ongoing investments if needed to avoid hitting 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.