Max contribution

[Matavian]

I still see room for confusion so let me try my hand at this.

You can contribute 18,500 to TSP. That can be either as Traditional or Roth or a mix of both, although the matching will always go in as Traditional. If you contribute 18,500 before the last pay period then 4% of the matching will be lost because you can not put anymore money in for the year so there is nothing to match. The 1% match will always go in though. If you turn 50 anytime during the year or are already over 50 then you can put in an additional 6000 makeup either as Roth or Traditional or mix of both (you can start doing the makeup from the first paycheck though, even if you are still 49). The makeup shows up separate though and doesn't affect the matching on the 18,500 regular contributions.

You can ALSO put 5500, or 6500 (age 50 or over), into a Roth or Traditional IRA even if you have maxed out the TSP contributions.

probably beat the dead horse but I was confused about how all this worked at one time too.

[nodak]

Just so I'm completely clear:
Max an (unmarried) individual can contribute to an IRA = $18,500 ($5,500 can be Roth, but that comes out of the total so only $12,000 could be put in traditional in this case)
Max an individual can have go towards an IRA (including matching) = $55,000 (so gov't matching COULD be as much as $36,500. The only way to reach $55,000/year is by employer contributions)
These max numbers are doubled for married individuals.
Is this everyone else's understanding?

The IRS $55,000 max limit applies to "defined contribution retirement plan" not the TSP (which is the same as a 401k). (IRS Pub 560)

Max (unmarried) individual contribution to an IRA = $5500 (for under age 50) $6500 (for age 50 and over)
The IRA can be either Roth or Traditional, same contribution limits. (IRS Pub 590a)

Your maximum contribution to your TSP account for 2018 is $18,500, the government match of 5% isn't part of the $18,500 limit. If over 50 years old, the IRS allows you to contribute an additional $6000 to your TSP account on top of the $18,500 limit.

For more clarification (or confusion) go to the IRS.gov website to read or download the IRS Publications #560, #590a, and any others that interest you.

Just for clarification, the TSP (like a 401k), is a defined contribution plan.

Our pension is considered a defined benefit plan.

The $55,000 limit does apply to a 401k, but nobody in the government would hit that limit due to the (IRS) annual compensation cap and our 5% match. Ignoring the Federal salary limit and just using the IRS numbers, I believe the max total a government employee could add to his account per year would be $32,250, catch-up not included. (This is my understanding, correct me if I’m wrong.) So to use the example from earlier, $150,000 x 5% +$18,500 = $26,000. Excellent number but less than half of the 55k limit.

[nodak]

Just so I'm completely clear:
Max an (unmarried) individual can contribute to an IRA = $18,500 ($5,500 can be Roth, but that comes out of the total so only $12,000 could be put in traditional in this case)
Max an individual can have go towards an IRA (including matching) = $55,000 (so gov't matching COULD be as much as $36,500. The only way to reach $55,000/year is by employer contributions)
These max numbers are doubled for married individuals.
Is this everyone else's understanding?

Smcwhorter;

You already got your answer but thought that horse could use another kick.
Your problem is that you are mixing terms and rules. The TSP is not an IRA, just consider it a 401K when looking at the rules. So the KISS answer, disregarding catch-up, eligibility rules and stuff like that and assuming that you earn enough money:

- EVERYBODY can put $18,500 a year into a 401k (Roth, traditional or mix). Marital status, income, other investments and matching funds have no bearing on that.

- While in the government, you will never hit the $55k limit, so don’t even think about it; it has zero impact on anything.

- An IRA (Roth or traditional) is an outside account that you open with Vanguard, Fidelity or other firm like that and has a limit of $5,500.

-Yes, the rules would apply to your spouse also.