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How Much Can You Contribute to the TSP in 2010?

401K contributions

office audit
irs
Tue Oct 20, 2009 7:28 AM

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I'm age 50 and want to contribute the 22,000 allowable. If I contribute 1,200 a pay period for 15 pay periods for a total of 18,000, then the remaining 4,000 over 11 pay periods or 363.64 a pay period, will I loose any matching funds? The 363.64 is in excess of 5% of my salary as a GS 9 step 3.

Re: 401K contributions

Inspector
TSA
Tue Oct 20, 2009 3:32 PM
Remember --you are dealing with two separate beasts: the $16500 basic allotment for TSP, and the $5500 Catch-up allotment.
The TOTAL is $22,000, BUT the allocation tally you designate by pay period contribution to "TSP-FERS" must project to a total of 16,500 (635 + per pay period) by December 31, 2010. This then qualifies you to allocate any additional amount you chose to the "TSP Catch-up" program, for a total of 5500 prior to December 31.
These are sepate "Deduction" items on your SEL (AD334).
The "TSP-FERS" BASIC allotment is the only one eligible for MATCHING funds, thus each pay period must show an adequate amount to qualify for THAT PERIOD'S match.
It really is quite a game!!

Re: 401K contributions

office audit
irs
Wed Oct 21, 2009 7:21 AM
Thank you Inspector for the explaination of the seperate beasts. So if I want to try to get more into my TSP earlier to allow for greater earnings, yet not loose any match I could contibute 1,200 a pay period for 10 pay periods, 12,000$, then spread the remaining 4,500 over 16 pay periods at 281.25. The 281.25 is still in excess of 5% of my gross wages and therefore would receive the matching funds. the CUC would be a totally seperate deduciton on my LES and whatever amount I wanted as long as it does not exceed the 5,000. Is this a correct concept? I hope I'm on the right track

Re: 401K contributions

Inspector
TSA
Thu Oct 22, 2009 10:00 AM
IRS Audit: Sounds like you're entering the "market timing" game from a side door!! A Certified Planner may better direct your efforts. Personnally, I have found that constant deduction/allocation to optimize both matching contribution and "Catch-up" qualification have worked for me. Not as exciting or profitable as a lucky "timed guess" at the market, but it has held its own and given long-term growth by averaging out peaks and valleys (like Q4, 2008). Good luck.

Pay Period calculations

Inspector
TSA
Tue Oct 20, 2009 2:45 PM

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Be aware of the FISCAL vs. CALENDAR glitch. the 26th pay period actually ends on January 1, 2011. Payment is not received until AFTER IRS close-out for 2010. This may also affect the 25th pay period if actual PAYMENT is on or after January 1, 2011. W-2 cut-off is COB December 31 unless a different FISCAL YEAR is declared, regardless of pay earned vs. payment made. Even adjusting by manually applying the 2009 PP 26 allotment may only leave 25 eligible pay periods. I have been stung by this in the past.

Applicability to Puerto Rico

InfoTech Spec
Internal Revenue Service
Tue Oct 20, 2009 4:59 PM

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For Puerto Rico residents: Puerto Rico Law (http://www.lexjuris.com/lexlex/Leyes2008/lexl2008186.htm) limits the amount to $9000.00 for 2009 plus $1000.00 for the Catch-Up program.

How to make up the max in TSP and CUC

Business Development Specialist
SBA
Wed Oct 21, 2009 9:15 AM

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I am new in this system so I have questions about the procedure.
1. If I contribute less than $635 and would like to make up to $16,500 at the end of the year, can I contribute the difference in one pay period?
2. What is the procedure to contribute to CUC?

Re: How to make up the max in TSP and CUC

Been There
TSA
Thu Oct 22, 2009 10:41 AM
1. CUC eligibility is based on TSP contribution tally (or PROJECTED tally) by 12/31 in any year. If TSP is not maxed-out (or PROJECTED to be at max), you're not eligible for CUC. There may be penalties assessed.
2. Catch-up is a separtate line-item. If you access TSP on-line, you will see a section for allocating amounts each pay period, just like TSP.
3. Lump-sum allocations may be restricted by maximum percentage restrictions per pay period, so planning is crucial.

Submission Time Frame

Tip off
DoD
Thu Oct 29, 2009 7:50 AM

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The only thing I would add to this excellent article would be the time period during which you can submit your contribution to reach the $16,500 and minimize the bi-weekly cost. I.e. I THINK the current period is between midmonth November and the first week in December, so that your change can take place in the first pay period in calendar year 2010.

Can anyone verify that is still accurate?

no loss on matching

Mr. Hardyandtiny
DA
Thu Oct 29, 2009 9:32 PM

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"..A way to avoid losing government matching contributions."

You don't lose matching contributions by contributing a large amount at the beginning of the year. If you contribute 1000 per pay period you will receive 500 in matching funds. It works out to the same amount of matching contributions regardless of when you contribute.

Window for submission of catch-up contributions.

Tip off
DoD
Tue Nov 10, 2009 7:54 AM

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The only thing I would add to this excellent article would be the time period during which you can submit your contribution to reach the $16,500 and minimize the bi-weekly cost. I.e. I THINK the current period is between midmonth November and the first week in December, so that your change can take place in the first pay period in calendar year 2010.

Can anyone verify that is still accurate? Anyone know the specific dates/window?

Total Comments: 32
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