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Federal Employees Benefits Q &A
Do you have questions about your federal employee CSRS or FERS pension/annuity or federal employee
retirement planning?
Concerns about your Thrift Savings Plan (TSP) account or what about federal employee pay and leave issues?
Ask your question here. You must Register before posting to this forum.
The Q&A forum is moderated by Ed Zurndorfer -- an expert on federal employee benefits --
and a Certified Financial Planner, chartered life underwriter and chartered financial consultant
in Maryland.
Zurndorfer is also the author of several federal employee benefits guides published
by Federal Employees News Digest.
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Please do not submit employee benefits questions to the webmaster or the forum moderator.
Note: FederalSoup.com has attempted to compile information that is as accurate and current
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change. Therefore, no warranties are made as to the accuracy or completeness of the information presented
in this column. If additional clarification or information is needed, it is suggested that competent
and professional assistance be sought. Mr.
Zurndorfer does not moderate other forums on FederalSoup and will not reply to general FederalSoup inquiries
submitted in this Q&A forum.
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Rank: Newbie
Groups: Registered
Joined: 8/26/2019(UTC) Posts: 7  Location: Chicago, Illinois
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I am considering to retire from federal employment before April 2020 and I'd also like to contribute the maximum amount allowed
to the TSP, as well as maximum catch up contributions.
Does the Govt have a maximum allowable percentage or fixed dollar amount that can be contributed per pay period?
Thank you.
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Rank: Senior Member
Groups: Registered
Joined: 9/10/2001(UTC)
Posts: 5,706
Was thanked: 153 time(s) in 142 post(s)
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If you want to get the maximum possible TSP matching from your agency by the time you retire from federal service before April 2020, then you must contribute at least 5 percent of your gross pay each pay date during 2020 that you are working in federal service.
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Rank: Newbie
Groups: Registered
Joined: 8/26/2019(UTC) Posts: 7 Location: Chicago, Illinois
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Yes, thank you, I understand that. My question was not related to being able to receive the matching contributions. I am aware of the requirements for that.
My question is related to contributing the entire annual IRS approved limit for 2020 ($19,500) before April of 2020, instead of the usual 26 biweekly periods in a year.
I want to contribute the maximum, but I still need to keep in mind that funds will be required to cover Social Security, Medicare, pension contributions, health insurance, income taxes, etc.
Having sufficient funds to meet these obligations is also what I am trying to wrap my head around.
Some of those numbers are inter-dependent. Do you know if agencies have a maximum TSP contribution allowed per pay period?
Thank you.
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Rank: Senior Member
Groups: Registered
Joined: 9/10/2001(UTC)
Posts: 5,706
Was thanked: 153 time(s) in 142 post(s)
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In answer to your question: If you retire before April 2020, then you are still allowed to contribute the maximum allowed for 2020 (the IRS' elective deferral limit) of $19,500 (plus catch-up contribution of $6,500). In other words, an employee is not limited as to what he or she can contribute to a defined contribution plan like the TSP for the year because the employee is retiring before Dec. 31 of that year. You can have as much as you want from your paycheck each pay date during January, February and March of 2020 for traditional TSP and/or Roth TSP contributions after the following mandatory items have been deducted from your paycheck: (1)Your FERS contribution - 0.8% of your wages; (2) FICA payroll tax of 6.2%; (3) Medicare Part A payroll tax of 1.45% of your wages; and (4) Insurance premiums (health, life, dental, vision, and long term care) (if applicable).
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 1 user thanked Ed Zurndorfer for this useful post.
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Rank: Senior Member
Groups: Registered
Joined: 2/26/2011(UTC)
Posts: 2,500
Thanks: 252 times
Was thanked: 526 time(s) in 438 post(s)
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That is -exactly- what I believed - retiring mid-July 2020. I intend to stuff my TSP with as much money as possible during that period, but hadn't thought much of the obligatory deductions. Now I shall re-calculate, to ensure both objectives are covered. Many thanks, Ed! You're a treasure.
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Rank: Senior Member
Groups: Registered
Joined: 9/10/2001(UTC)
Posts: 5,706
Was thanked: 153 time(s) in 142 post(s)
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You are most welcome. Glad to be of service.
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