Understanding Thrift Savings Plan (TSP) Contribution Limits

The Thrift Savings Plan (TSP) offers a great opportunity for military and federal civil servants to save toward retirement.

However, there are some important contribution limits to be aware of.

The annual contribution limit of $19,500 applies to either the traditional or Roth TSP. The federal government matches up to 5% of basic pay for military, for a total contribution limit of $39,000.

However, if you are deployed to a combat zone, military are able to increase their contributions to a traditional TSP to an annual limit of $58,000.

What’s important to understand is that once you hit the limit and return from a combat deployment, you are restricted from making more contributions to your traditional TSP if you exceeded the $19,500 during the deployment. However, you are not restricted from making more contributions to a Roth unless you also hit the higher annual limit.

This is important for match planning purposes. You want to keep this in mind if your combat deployment occurs in the earlier part of the year. You don’t want to contribute too much too early and miss out on the match later in the year.

Have a great weekend and I’ll talk to you again soon!

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