Retirement & Financial Planning Report

In the TSP, while standard contributions roll over from one year to the next unless you direct otherwise, “catch-up contributions” stop at year’s end—regardless of whether you have put in the maximum allowable amount up to that time.

In the “catch-up” feature, investors who are 50 and older by year’s end may make special investments ($6,000 in 2019) toward their accounts over and above the regular annual dollar cap ($19,000 in 2019).

Catch-ups are made through regular payroll withholding, as are standard TSP contributions. Thus, if you want to make catch-up contributions this year, you must elect to do so regardless of whether you made catch-ups last year. Also, those who did not make the maximum contribution in the prior year cannot make up for the difference in the current year.

Among the 2.6 million federal (including postal) employees with accounts, about 180,000 reached the standard maximum in 2017 (when it was $18,000), 120,000 of them were old enough to make catch-up investments, and 79,000 hit that maximum (which was also $6,000 in that year).

More on TSP Catch Up Contributions at ask.FEDweek.com