TSP Limit Rises to $17,000 in 2012

[Sarah]

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[RangerDave]

What will that be per payperiod? We will need to make the allocation change by middle of Dec.
Good news Sarah, thanx.

[Sarah]

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[Dr Pain]

I guess my take-home will be going down even more in 2012.

[whitty4]

Taxes down $100, take home down $400.

[cubi]

Hello Mrs. Sarah or could someone clarify this for me please:

Let's say I max contribute for 2012 an amount of 17,000 (564/pay period)

Employer matches 5% of salary so let's say it's 5000

So total into my tsp is 22,000.

I didn't incur any income tax on my 17,000 contribution into tsp. How about the 5000 above the max contribution limit, does that in any way get taxed ???? If not, then I got 22,000 into tsp not a dime taxed ???????

[DavidTiger]

Hello Mrs. Sarah or could someone clarify this for me please:

Let's say I max contribute for 2012 an amount of 17,000 (564/pay period)

Employer matches 5% of salary so let's say it's 5000

So total into my tsp is 22,000.

I didn't incur any income tax on my 17,000 contribution into tsp. How about the 5000 above the max contribution limit, does that in any way get taxed ???? If not, then I got 22,000 into tsp not a dime taxed ???????

All of it is not taxed. It's only taxed when you withdraw it.

[Navig8tor]

$1416.66/month!! That's NICE!! Nice big monthly chunk of quan that just so happens to coincide with my 26-year longevity pay increase AND a cheesy 1.6% military pay raise (that I'm HAPPY to get in THIS economy).

Combine those two pay raises, that happen less than a month apart, and I can afford to up my contribution to the full Monty with no real loss in current take-home pay. Can't beat that!!

Hold up a second: Maybe I can buy a new truck...or pay off my boat loan...or....take a vacation in Costa Rica. (Cro' told me LIVE A LITTLE).

NAH, I'll stick with the bigger contribution, keep my 11-year old F-150, not take an expensive vacation, and I will continue to pay off my boat loan as it's currently set up (a low-interest loan against my private retirement account).

I may just pay the interest on the boat loan so the balance never gets any bigger, then my estate can pay it off when I die. Kids may not like that move but....we're not OBLIGATED to pay our kids' way. Get a J.O.B. already...and get off my boat!!

[rikarus]

Could someone clarify, I thought it was 16.5k including the employer matching contribution, when I look at my statement of personal benefits on employee express that is how they show it. Is that not the case?

[Dr Pain]

Could someone clarify, I thought it was 16.5k including the employer matching contribution, when I look at my statement of personal benefits on employee express that is how they show it. Is that not the case?

No this is just what you put in. I max now at $16.5 and get ~$6k match. I will increase to $17k for Jan.

[RangerDave]

rikarus,
Just to clarify. The max this year was 16.5. According to Sarah, the max will increase to 17K for 2012. You will need to make the change in middle of this coming Dec. Employee express will advise you.
Good luck!

[Sarah]

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[bab951]

And that money might become increasingly important. There's a new bill in the Congress to eliminate FERS pensions for federal employees. In other words, to take one leg out of the three legged stool.

My three-legged stool is kinda tippy. I started as CSRS and switched to FERS in 1987 or so. According to the tools provided at the time, the decision for me was a 6 of one, half a dozen of the other - no clear best way to go. I switched to FERS because it provided flexibility for the future in case life took me in a different direction. I hoped the TSP would more than make up for any difference in the pension. Will it? I don't know. Had I stayed in CSRS, I'd get close to 80% of my salary as pension. I was pleasantly surprised to learn that my CSRS pension is based on my high-three now and not the high-three when I was CSRS. Oddly enough, that makes the CSRS pension just about as much as my FERS pension even though I've worked almost twice as many years under FERS.

I'm 60 and single and thinking about retiring in a couple of years. If the Republicans get their way, I'll be forced out of here sooner rather than later, much to the dismay of my co-workers. With the pay freeze, I've pretty much hit my high three. I've been a step 10 for many years so the only increase I had to look forward to was the January raise. The only way to increase my salary now would be to put in for a promotion to a job I would hate, assuming I would be selected. Life's too short to be miserable and stressed, even though it would make a pretty big difference in the pension. So, this leg of the stool isn't growing any more.

My TSP took a big hit in 2008. My bad - I screwed up. I really don't think it's recovered enough to account for the losses, the contributions that were also lost, etc. That said, I have a decent balance. But, I'm not anxious to risk a great deal at this point so I won't be making tremendous gains. This leg got part of it sawed off.

Because I started out as CSRS, my Social Security will be reduced because of the windfall reduction act. Bah! I think those of us who couldn't pay into social security should not be penalized for not having 30 years of coverage with significant earnings. My part-time work in high school and college doesn't count as significant. I'd have to work until I'm 67 to get 30 years. I've already got 38 years in and I'm tired of the BS and politics. I don't think I can do another 7 years. I'm taking it one day at a time right now. This leg also gets part of it sawed off.

All that whining aside, I'm better off than a lot of people. Some days I think I can afford to retire and other days I think I can't. It takes a crystal ball and mine's pretty cloudy.

[Killjoy]

@ Sarah,

I am in no way surprised that only 5% contribute to the maximum. Especially IRT Active Duty Service Members. In order to meet the max, I have to contribute 25% of my base pay (and I do as I am single with few expenses). As an O-3 with 10 years of service, this is still quite a hit to my pay haha! I wish I was banking like some of the civilians on this forum, but I (like most active duty) simply can't afford to max out the contributions

[sludg]

@Killjoy

The civilians that are banking are also pulling retirement pay to offset them being able to max contribution. 10 more years and you will be O-5 or O-6 with a nice retirement check and once you get a GS position things will change for you. I myself didn't retire from the military and can't afford to max at all. Right now 10% is as high as I can go and money gets tight sometimes. Having the post 9/11 GI bill helps a lot but thats only good for 3 years. (with all the gov budget cuts I don't see the post 9/11 lasting too much longer either)