Timing Issues Could be Tricky

Although some investors apparently plan to make catch-up contributions out of only a few pays, others apparently intend to spread the investments out over the remainder of the year. In that case, special care must be taken; those investors should check exactly when the deductions would begin and how many more pays they will receive during the year. In particular, the TSP has said, investors should remember that the last pay period of the year extends into calendar year 2004, but any catch-up election will cut off at the end of the current calendar year, possibly cutting off the investments before the investor has put in the full desired amounts. Catch-up elections do not carry over from one year to the next. New elections must be filed each calendar year, and any amount invested below the maximum this year cannot be made up next year.