On November 1, 2023, the Internal Revenue Service (IRS) announced the 2024 contribution limits for retirement accounts.
On November 1, 2023, the Internal Revenue Service (IRS) announced the 2024 contribution limits for retirement accounts. The limit for a 401(k), 403(b), most 457 plans, plus the Thrift Savings Plan (TSP), has been increased to $23,000 while the Catch-Up Contribution limit is $7,500. This means federal employees age 50 and older can contribute a total of $30,500 to their TSP next year.
Quick Facts About TSP Catch-Up Contributions
Surveys of federal retirees reveal that one of their biggest regrets is not taking advantage of Catch-Up Contributions before separating from service.
Don’t make the same mistake:
You can make TSP Catch-Up Contributions in addition to your regular contributions if you’re age 50 or older, or turning 50 during the calendar year – and even if you turn 50 on December 31st.
Catch-Up Contributions can only be made from your basic pay. Bonuses, special pay or incentive pay cannot be applied toward Catch-Up Contributions.
You no longer need to make a separate Catch-Up election. Once you reach the deferral limit for the year, your additional contributions will automatically “spill over” and count as a Catch-Up contribution.
“If you can’t recall the percentage you elected for your TSP contributions when you were hired you can increase it today.“
Are You Walking Away From Free Money?
Approximately 20% of federal workers are not contributing the 5% of their income required to earn their TSP agency match. Which means they’re walking away from free money.
In fact, the growing concern over federal workers missing out on their agency match triggered a major change in automatic TSP enrollment. Starting October 1, 2020, newly hired FERS employees now have 5% automatically deducted from their pay for TSP contributions to help ensure they get their agency match.
Unfortunately, far too may federal workers hired years ago suffer from set-it-and-forget-it syndrome. If you can’t recall the percentage you elected for TSP contributions when you were hired you can increase it today. Go to www.tsp.gov/making-contributions/ for information.
Make A Commitment To Max Out Your TSP Contributions In 2024
Your TSP is the only retirement income completely in under your control. Though your FERS annuity (pension) and Social Security benefit provide fixed income you can count on, these benefits may not keep up with inflation 30 years from now, even with Cost-of-Living Adjustments (COLAs). In fact, your TSP may be the only thing standing between you and running out of money over a long, 30-year retirement.
Connect with our Federal retirement Specialists who fully understands how your TSP works. They can help you find ways to max out your contributions in 2024.
Source: https://www.irs.gov/newsroom/
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