Ask The Experts: Money Matters

By Mike Miles

TSP maximum contributions

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Q. I am a federal worker who will turn 50 next year. I plan on putting in the maximum amount for contributions ($17,500) and catch-up contributions ($5,500). Thrift Savings Plan form instructions (TSP-1, TSP-U-1-C) require a whole dollar amount for contributions per paycheck, and we get paid every two weeks. $17,500/26 = $673.077.  $673 x 26 = $17,498, which is two dollars short of the limit.  The catch-up limit doesn’t kick in unless you reach $17,500, but there is no way to get there with the current set of instructions. What do you recommend? I don’t want any penalties if I go over the limit but don’t see any way unless they come up with a whole dollar amount divisible by 26. The catch-up contributions also have to be in whole dollar amounts.  $5,500/26 = $211.53846. Do I go with 211 x 26 = 5,486?  At least here there are no built in penalties other than losing out a few dollars from what is being invested. Why don’t they just let you put in an annual dollar amount on the TSP form and catch-up form, since the rules are written as such? 

A. You can simply over-contribute a little, and the TSP will automatically stop your contributions when the annual limits are reached.

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