TSP Limits Increasing

The IRS has announced that investment limits on tax-favored retirement savings plans such as the TSP will rise in 2009. The cap on regular contributions by employees—called the "elective deferral limit"—will rise from $15,500 to $16,500. The TSP for many years had separate percentage of salary limits on regular contributions, but those were phased out and now investors are subject only to the dollar cap. In addition, the limit on "catch-up" contributions—additional contributions allowed for those 50 or older in a calendar year—will go from $5,000 to $5,500.