Q: I will turn 70 at the end of 2017 and was contemplating retiring at the end of that year. However; It’s too darn cold in December! My question is this: If I delay retirement until June 30, 2018 (the year I will turn 70 and ½), can I “double up” my TSP contributions and catch-up contributions as if I worked the full year?
A: Based on your age and specific conditions of your question, yes, in 2018 you can make your “double up” contributions. But, as with anything concerning tax regulations there is always IF and BUTS!
For you, limitations are based on how much you earn during that partial year, not how many months you work. Based on your age, according to the IRS website, your contribution amount would be limited to $18,000 + $6,000 (catch up since you are over 50 years old) or 100% of your compensation for the year (whichever is least).
So, if during that partial year in 2018, you earn at least $24,000, max out those TSP contributions, one – more – time!
Note: This assumes nothing changes in IRS regulations between 2017 and 2018.
Disclaimer: This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
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