Can I Contribute to Both an IRA and the TSP?

By on December 15, 2015 in Q&A, Retirement with 43 Comments

Q: A co-worker recently told me that I could contribute to both an Individual Retirement Account (IRA) and the Thrift Savings Plan (TSP). I thought there was a prohibition against contributing to both types of retirement account. Is what I was told by my co-worker true?

A: Yes it is, and you are not alone in thinking that you cannot fully fund both your TSP and an IRA. I’m not sure where that belief came from, but it’s persistent. I almost always have a few participants in each pre-retirement class I deliver for federal agencies who are laboring under this misconception. I recently updated an article I wrote for FedSmith to include 2015 and 2016 IRA contributions and limits.

If you can afford to contribute to both the TSP and an IRA, you should. In 2016 you can contribute $18,000 to the TSP and $5,500 to an IRA. If you are 50 or over (this includes the year in which you turn 50) you can contribute an additional $6,000 to the TSP and $1,000 to an IRA.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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