In case you are unaware, the Thrift Savings Plan or the TSP is a retirement plan for those who are in the armed services. It is offered to the active members. However, according to US Navy Retiree Doug Nordman, more than half of the servicemen do not use it, even though it has a few advantages of the IRA or 401k. This is because there are many advantages as well as many disadvantages related to the Thrift savings plan. But one thing is for sure, it is available for extremely low fees. Compared to this, the minor disadvantages like not being able to invest in real estate seem to be negligible.
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Image CreditsThe net expenses in an average, charged for the year 2014 were .029%. For this year, the Treasury Department has declared swelling balanced figures for retirement account reserve funds for 2016, and there are a couple of minor changes to salary stage outs for certain IRA supporters and to the balanced gross wage limits for catching the saver’s credit. This means that any room for extra savings for the self employed, etc, are pretty squished. This brings us to the same place we were at the beginning of this year. Things remain quite in the same position as they were last year when it comes to Thrift savings plan.
However, this year in 2015 there were small increments in the maximum amounts which you could save. This is what is going to be carried forward in 2016. So what caused this? Basically the legal threshold did not match up to the cost of living index. However, this is still a good opportunity if you are trying to squeeze out every other option for retirement plans. With inflation coming at us and with retirement amounts depleting, it is essential to take advantage of the slightest option that opens up. This is why if you are older than 50 years, you can rake up to some amount from the employee deferrals into the 401k on Thrift savings plan.
The new 401k catch up extends the same amount that is $6000 contribution limit on Thrift savings plan for those who are 50 or up. But even if you are not turning 50, you can make yourself an extra $6000 before December 31, 2016. You can also front load up your contribution, if you have plans arranged in a fashion that allow that. Recently the Internal Revenue Service has announced the limits for contributing to the Thrift Savings Plan annually. These limits have not changed from the past year and remain at $18000 per year. So you can calculate how much it is that your limit can adjust and incur within this amount.
Even though the annual limit is fixed at $18000 a year, you can extend and go beyond that amount if you have tax exemption compensations. For example, if you have had combat payments, then it is quite possible that you will be able to avail these. Apart from these, the Adjusted Gross Income or the AGI remains between $184,000 and $194,000 – for those who are married and making contributions towards the Roth IRA. For those who are single or the head of the house, the limits are lower. These data have pretty much remain unchanged over the last few years.
