[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]For those who may not have heard already, the maximum contribution limits have been increased for this new year. For those that are trying or have been meeting the limit will have the chance to put in a little more money into their savings.
In 2019, the cap–officially known as the elective deferral limit–was $19,000. TSP participants will have a limit increase this year to $19,500.
For the Federal Employees that are eligible to make catch-up contributions, the maximum contribution was increased to $6,500 from last year’s $6,000. To be eligible, you must be at least turning 50 by the end of the year or older. Along with that, you will have to be on track to hitting the elective deferral limit by the end of the year.
This year, there are 26 pay periods. Each pay period will need a contribution of $750 to meet the limit.
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
The general contribution amount you have set in place can be carried over from the year before if you do not wish to change it. However, those that are wishing to make catch-up contributions have to elect for it once again. The good news is that this will not have to be done until next year in 2021. The federal workers that qualify to make catch-ups will automatically have that ability to do so instead of having to elect for it.
Statistically, roughly 5% of TSP participants make the maximum contribution limit. A majority of this percentage tends to be eligible for catch-up as well, which many reach as well.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”35980″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
