Saving for Your Thrift Savings Plan
Funding your Thrift Savings Plan (TSP) account through TSP.gov, with the specifc goal of getting the maximum benefits, is a good goal to set. The IRS sets a limit on how much federal employees can contribute to the TSP. The great design of the TSP is that agencies participate in a matching scenario. Although the IRS sets a limit on contribution levels, the rule of thumb is to make certain you don’t reach that limit too early and miss out of the agency match paid over 26 pay periods in a year.
Paying attention to your TSP matching contributions is possibly even more important than what TSP fund you select. This is because the TSP match can act like ‘Free Money’ because for every dollar you contribute (up to the maximum match) your Agency contributes an identical amount to your TSP. – Its like doubling your money, Day-One.
You can also wait too late to get all of your matching benefits of our TSP accounts.. Therefore, you want to pay close attention to your contribution levels and the time it will take to reach the maximum limit and still receive matching funds. This situation is of particular concern if your salary changes. The level of contribution necessary to reach your maximum contribution changes depending on your salary.
If you set out to reach your contribution level too quickly called front-loading, you run the risk of reaching the level prior to the end of the 26 pay periods; depriving you of the maximum agency match. It is important to watch your TSP contribution levels so that you can contribute your 5% in all 26 pay periods to get the TSP match the agency offers.
You can also visit your agency TSP.gov representative or go online at and view your TSP.gov Account to see how much you need to contribute each pay period to make certain you are not reaching your contribution limit too early in order to realize the agency’s 5% TSP match.
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