Does the TSP’s Annual Contribution Limit Include the Agency Match?

One of my co-workers said the $18,000 annual contribution limit to the TSP includes both his portion and the agency match. Is this a lost savings opportunity?

Q.  One of my co-workers insists that the TSP contribution limit of $18,000 covers both his contribution and the government’s matching contribution, so therefore he is contributing less than the full $18,000 each year.  Is he missing out on a savings opportunity?

A.  Absolutely!  The $18,000 amount that you can contribute is called the elective deferral limit, that is, the amount that you can contribute and defer paying taxes on (as long as you are contributing to your Traditional TSP balance).  Agency contributions are over and above that amount.

Let’s say that you are making $100,000 a year and are contributing 18% of your salary ($693 per pay period).  Uncle Sam will be contributing another $5,000 (5%) to the TSP, giving you a total of $23,000 in the TSP.  If your co-worker is also making $100,000 a year, he is contributing $5,000 less than he is allowed to.

Your co-worker’s misconception is not uncommon among FERS employees.  All federal employees should avail themselves of an opportunity to attend a pre-retirement seminar if their agency offers them.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at to discuss schedules and costs.

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.