Ask The Experts: Money Matters

By Mike Miles

Roth TSP limits

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Q. There is around a $5,000 annual limit to a Roth IRA based on income and age. Does that limit apply to TSP? In other words, can I put all $17,500 plus the $5,500 catch-up contributions for those age 50 and older into the Roth TSP and pay taxes on it now, rather than later regardless of my income? I am a civilian over 50 years old in FERS.

A. The Roth IRA limit does not apply to Roth TSP contributions.

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Comments

  1. Michael Says:
    December 31st, 2012 at 11:15 am

    Based on the TSP website explaining Roth contributions, for the TSP, you can contribute 17,500 total – - – i.e. 12,500 TSP IRA and 5000 TSP ROTH. Or, you could contribute 17,500 to TSP IRA and 5000 to a non-TSP ROTH. This doesn’t make sense legally and I have requested further guidance on this point from TSP, but have not heard back. Just restating current TSP guidance on ROTH contributions.

  2. Michael Says:
    December 31st, 2012 at 11:23 am

    Update on my last comment – it appears that the ROTH limit does apply to the TSP, with an out for those 50 or older: here’s the official word from TSP:

    “The elective deferral limit for 2013 is $17,500. The combined total of your tax-deferred traditional and after-tax Roth contributions cannot exceed the elective deferral limit for the year. The year in which you reach age 50, you will become eligible to make catch-up contributions. The catch-up contribution limit for 2013 is $5,500. You can find the elective deferral limits on the website by clicking Current Limits and Rates under What’s New. Please keep in mind that the TSP is not an IRA and is governed by different rules and regulations.”

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