contribution limit

The percentage limits on TSP contributions are to be lifted in January 2006. According to the TSP folks, "the Internal Revenue Code places an annual limit on elective deferrals, e.g., tax-deferred employee contributions to the TSP. For 2006, the elective deferral limit is $15,000."

2006 Change

For 2006 there are no TSP limits. The limits are now IRS driven. $15000 is the IRS max so it becomes the TSP max.

Catchup in retirement year

Was taking out max TSP and did my catchup max early in 05. Somewhat unexpectedly took early out in June...so my annual TSP was limited to 6 months even though catchup was max. Any tax implications with catchup? Thanks.

$15,000 max

So as I understand this, if I cannot contribute the max of $15,000 during the year, I am out of luck when it comes to making any catch-up contributions, is that correct? So if I have a relatively small annuity that I wanted to convert over to my TSP, I couldn't do it because I can't afford to contribute the yearly max of $15,000? Very few people I know could afford to contribute that much a year into their TSP, but would, if possible, still like to take advantage of the great returns that TSP offers. At the time TSP was initiated, I admit I was foolish for not getting into it from the beginning, and now I would like to make up a little bit of ground using an annuity from my deceased mother, but I guess I'll just have to invest my money elsewhere.

MAX TSP Contribution

The IRS maximum is $15,000. Starting in 2006, you are allowed to place that much money in the TSP - even if $15,000 is more than 15% of your income. If you are 50 or older, you can use the "Catch-up" option. However to do so you have to put in the maximum amount which is the IRS limit of $15,000.

I did all of this the day before the article was published. Everything has been confirmed.

matching

There are advantages for FERS employees to using the catch-up contribution but the article was written to apply to both. The example of how the money accumulates assumes no government match--that is an added benefit. CSRS employees would, presumably, benefit from having money accumulate as well.

Work - nothing to be ashamed of

That closing article struck me the same way BUT then don't let it bother you. There's nothing wrong with working all your life - quite honorable in fact. Like your work? Work likes you? Go for it, If it's for the money, that's even a better reason. What ever happened to the work ethic anyway?

Insensitive closing remarks

I agree. The closing to this article was very insensitive. How does the author expect a GS-05 employee to contribute $5,000 per year to savings? I personally think that the locality pay needs to be adjusted to take into account the difficulties faced by lower paid employees. A couple extra percent for a GS-14 is alot more help than that percent for a GS-5. Why not apply a larger percent for those at the lower end so they have a better chance?

One of those . . GS 5 that is.

At 70, it is tough to know that I'll be living on SS and the meager but much appreciated TSP & FERS benefits after only 5 years of PFT with the agency. Don't have any other income, and physically will be unable to do this job past one and a half more years. However, what is, is. Am a writer, maybe do some part time stuff from home. Anyone have any suggestions, or advice of a true and serious nature? I'm open to reading them. Anyone is the same position I am? If so, what are you, or what will you do to supplement your income?

Re: Speedinf Toward Your Retirement

What a bunch of whiners. Would it be better to tell people don't worry about not having enough money; everything will work out okay? Sometimes the truth may hurt. Since when does telling someone the truth make them insensitive? It seems to me he is doing people a favor by being straight with readers and not lying or sugarcoating the facts of economic life. If we don't put enough money into the TSP and are in FERS, we may not be able to retire. We will have to work until we are too ill or until we die. Does that make me insensitive too?

Re: Speedinf Toward Your Retirement

Personally, I think the Federal government needs to do a better job of counseling new, incoming FERS employees on the program and TSP. I can't believe the number of people who come in who don't understand that they need to immediately begin the 5% for TSP so that they can get the government match to that. Doing so would greatly increase the value of their TSP funds over the course of their career.

While I feel for those who can't increase their contributions, it's obvious that people in this country are living beyond their means. Look around...we are a spoiled society. Many people live their lives on credit and can't ever get out of debt, thus the reason for changes to the credit card minimum payments required that just went into effect. While credit is good, it needs to be used properly and not as a means to live day-to-day.

Re: Speedinf Toward Your Retirement

Yes, a GS-05 is probably having a tough time really adding to their TSP. What can I say, there isn't pay parity. Some are VASTLY underpaid (not referring to myself here, I'm only slightly underpaid) and some are INCREDIBLY, UNBELIEVABLY overpaid.

Re: Speedinf Toward Your Retirement

I agree w/retired CE, USFS. What's wrong w/working past traditional retirement age?

I don't think people appreciate how working gives structure and purpose to their lives. That's why substance abuse is so prevalent after retirement. Retirees get so bored they start drinking, etc.

Health care costs aside, Americans are also healthier than our predecessors--so we're likelier to be stronger as we age. And a sense of productivity only adds to one's well-being.

I for one plan to work after I retire from the federal workplace. When I leave, it'll be to do something else. Actually, I need to--unexpected circumstances hit my wallet--but no matter. I'm strong enough to do so.

shrink to fit

Go to print menu, click on "shrink to fit" (page) then "review print".

Re: Is it Worth it Now - Maybe I'm too late

Makes lot of sense however, I'm 62 years young, and only been a GS for the five yrs. Am I to late to buy in??? Please advise thanks.