There are income limits that affect some IRA contributions. Image: Vitalii Vodolazskyi/Shutterstock.com
By: John Grobe, Federal Career ExpertsCarole King crooned “it’s too late baby, it’s too late” in 1971 and it truly is too late for some things. One of the things for which it is too late is contributing to a 2022 Individual Retirement Arrangement (IRA). The deadline for contributing to an IRA is the filing deadline for that year’s tax return – and the filing deadline for a 2002 federal income tax return was April 18, 2023. When it comes to IRA contributions, whether or not you utilize a filing extension, the deadline remains the April date designated by the Internal Revenue Service.
But wait! In 1992, T Bone Burnett sang “it’s not too late”. He wasn’t singing about what we call “prior year contributions” to IRAs, but his lyrics apply to current year IRA contributions. You have until April 15, 2024, to make a contribution to an IRA for 2023; that’s almost a year from now.
For tax year 2023, an individual can contribute $6,500 to an IRA ($7,500 if they are 50 or older). This is true whether or not the individual is participating in an employer sponsored retirement plan such as the TSP.
I suspect that most of us don’t have $6,500, let alone $7,500, sitting around to throw at an Individual Retirement Arrangement, but we can spread our payments out over the year to ease the burden. $542 a month (direct debited from your bank account) will result in slightly more than $6,500 being set aside in a 12-month period. $625 a month will add up to $7,500. Why not start now and build your 2023 IRA contribution.
There are income limits that affect some IRA contributions. If your income is above a certain level, you will not be able to contribute to a Roth IRA. Regarding traditional IRAs, there is no income limit that affects contributions, but, if you are a participant in an employer sponsored retirement plan (as all federal employees are), there is an income level above which you will not be able to deduct contributions to a traditional IRA. These limits can be found in IRS Publication 590-A, Contributions to Individual Retirement Arrangements.
There are no income limits that would affect your TSP contributions.
DON’T FORGET that you must still take a 2023 required minimum distribution from the Roth portion of your TSP if you are age 73 or older and have separated from federal service. But, SECURE 2.0 did away with Roth RMDs from employer sponsored plans beginning in 2024.
DID YOU KNOW that TSP investment expenses are paid to a large extent from forfeitures of Agency/Service automatic contributions of FERS/BRS participants who leave federal service before they are vested (3 years) and loan fees.
5 Steps to Protect Your Federal Job During the Shutdown
Over 30K TSP Accounts Have Crossed the Million Mark in 2025
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025
Primer: Early out, buyout, reduction in force (RIF)
See also,
OPM Guidance Addresses Pay Issues arising During, After Shutdown
