How much can I invest?

There are two separate limits, both set annually by the IRS and which apply to all similar employer sponsored retirement savings programs. They are linked to inflation, but the inflation measure has to cross certain thresholds before it triggers an increase. Therefore, in some years the TSP investment limits go up and in others they don’t.

The ceiling of greatest interest is called the “elective deferral limit,” $18,000 in 2015, the standard annual investment maximum. The other is the “catch-up contributions” limit, additional investments (up to $6,000 in 2015) allowed for investors who are at least age 50 at any time in the calendar year—even if their birthday is December 31. To make this additional investment, a participant must already have hit the elective deferral limit or must be on an investing pace to hit it by the end of the year.

Government contributions for Federal Employees Retirement System employees don’t count against the elective deferral limit for regular investing. There are no government contributions associated with catch-up contributions by FERS employees. Employees under the Civil Service Retirement System receive no government contributions toward either.

Transfers into the TSP—for example, from a prior employer’s 401(k) plan or an individual retirement account set up to hold the proceeds of such a plan—also don’t count toward the limits.

If you are investing in both tradition and Roth-type balances, the amounts of those two types of investments are combined for the dollar limits.

2021 Digital Almanac

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