Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Android | Google Podcasts | RSS
Thrift Savings Plan officials recently released the 2020 Thrift Savings Plan Contribution Limits. Thrift Savings Plan contribution limits are calculated on an annual basis based on the cost of living indexes and can increase based on rules set by the IRS.
This marks the second year in a row that members are able to contribute more than the previous year. The 2020 TSP contribution limit for employee deferrals is now $19,500, up from $19,000 in 2019 (and $18,500 in 2018).
The catch-up contributions also receive an increase to $6,500 per year. (Catch-up contributions are only available to persons aged 50 and up). This is the first increase for the catchup contribution limit since 2014.
There is also a $1,000 increase in the Max Annual Addition Limit, which increases from $56,000 to $57,000.
Let’s do a deep dive into this topic. While contribution limits seem straightforward on the surface, this is actually a very interesting topic. Certain members may have complicated situations that deserve special attention (multiple TSP accounts, multiple retirement accounts, contributions while deployed, participating in both the Roth and Traditional TSP, etc.).
2020 Thrift Savings Plan Contribution Limits
The 2020 Thrift Savings Plan Contribution Limits are as follows:
Elective Deferral Limit: $19,500
This is the limit employees can defer from their paychecks. It applies to Traditional and Roth TSP accounts (they share the same limit, so you can’t contribute $19,000 to each). This includes your base pay, special pay, and bonuses. To max out your TSP, you would need to contribute $1,625.00 per month from your paychecks. That is very aggressive, but it can be possible for some, depending on your rank / pay grade, and living expenses.
Annual Addition Limit: $57,000
This is the maximum amount you can put into your Thrift Savings Plan from all sources (except catch up contributions – see the section below, this is the $6,500 you can contribute if you are age 50 or over). Deployed military members can exceed the $19,500 annual Elective Deferral Limit through payroll deductions while deployed.
Excess contributions made while deployed count toward the Annual Addition Limit (contributions above $19,500 automatically go into the Traditional TSP). This limit also includes Agency contributions (matching contributions made by the Civil Service, or matching contributions from the military, as part of the Blended Retirement System, starting in 2018).
Catch-up Contribution Limit: $6,500
Members age 50 and over can contribute an additional $6,500 per year to their elective deferral limit (total of $26,000) and Annual Addition Limit ($63,000).
Explanation of Thrift Savings Plan Contribution Limits
The following chart displays the 2020 Thrift Savings Plan contribution limits, with notes about each type of contribution. The combined maximum one can contribute, including all agency matching contributions, contributions from special pay and bonuses, and contributions while deployed, is $57,000 ($63,000 for those who are eligible for catch-up contributions).
| 2020 Thrift Savings Plan Limits |
Max Contribution | Internal Revenue Code | Notes |
|---|---|---|---|
| Elective Deferral Limit* | $19,500 | IRC §402(g) | Applies to combined total of traditional and Roth contributions. For members of the uniformed services, it includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay, and bonus pay, but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone. |
| Max Annual Addition Limit | $57,000 | IRC §415(c) | An additional limit imposed on the total amount of all contributions made on behalf of an employee in a calendar year. This limit is per employer and includes employee contributions (tax-deferred, after-tax, and tax-exempt), Agency/Service Automatic (1%) Contributions, and Matching Contributions. For 415(c) purposes, working for multiple Federal agencies or services in the same year is considered having one employer. |
| Catch-up Contribution Limit | $6,500 | IRC §414(v) | The maximum amount of catch-up contributions that can be contributed in a given year by participants age 50 and older. It is separate from the elective deferral and annual addition limit imposed on regular employee contributions. |
Current & Historic Thrift Savings Plan Contribution Limits
| Year | Annual Contribution Limit | Max Catch-Up Contribution Limit | Annual Addition Limit | Annual Addition Limit w/ Catch-Up |
|---|---|---|---|---|
| 2007 | $15,500 | $5,000 | $46,000 | $51,000 |
| 2008 | $15,500 | $5,000 | $46,000 | $51,000 |
| 2009 | $16,500 | $5,500 | $49,000 | $54,500 |
| 2010 | $16,500 | $5,500 | $49,000 | $54,500 |
| 2011 | $16,500 | $5,500 | $49,000 | $54,500 |
| 2012 | $17,000 | $5,500 | $50,000 | $55,500 |
| 2013 | $17,500 | $5,500 | $51,000 | $56,500 |
| 2014 | $17,500 | $5,500 | $52,000 | $57,500 |
| 2015 | $18,000 | $6,000 | $53,000 | $59,000 |
| 2016 | $18,000 | $6,000 | $53,000 | $59,000 |
| 2017 | $18,000 | $6,000 | $54,000 | $60,000 |
| 2018 | $18,500 | $6,000 | $55,000 | $61,000 |
| 2019 | $19,000 | $6,000 | $56,000 | $62,000 |
| 2020 | $19,500 | $6,500 | $57,000 | $63,500 |
Types of Thrift Savings Plan Contributions
There are three types of TSP contributions:
- Regular Employee Contributions (including automatic enrollment contributions)
- Catch-up Contributions (for participants age 50 or older)
- Annual Addition Limit Contributions
Regular Contributions (Elective Deferral Contributions)
Eligible TSP participants can begin making regular employee contributions at any time. These contributions, also known as Elective Deferral Contribitions, are made from basic pay.
Traditional contributions are made before taxes are withheld and Roth contributions are made after taxes have been paid. Your contribution election will remain in place until you elect to stop or change the contribution amount, reach the contribution limit, or take a Thrift Savings Plan financial hardship withdrawal.
Catch-up Contributions
Catch-up contributions are only available to those aged 50 and above. You must elect to make catch-up contributions each calendar year. If you don’t elect to make catch-up contributions each year, they will automatically stop. You can make regular and catch-up contributions at the same time.
If you plan the amounts you contribute carefully, you will maximize both the $19,500 regular contributions and the $6,500 in catch-up contributions during the last pay period of the year. This is much simpler than having to keep track of when your regular TSP contributions will max out, stopping the regular contributions, and then starting catch-up contributions.
In addition, if you are eligible to make catch-up contributions and you are deployed to a designated combat zone, you will not be able to make any traditional catch-up contributions from your tax-exempt pay. However, Roth catch-up contributions from tax-exempt pay are allowed.
Annual Addition Limit Contributions
Annual Addition Limit Contributions include all contributions made on behalf of the employee during the applicable calendar year. This limit includes all employee contributions, as well as employer matching contributions.
The annual addition limit also applies to contributions above the annual Elective Deferral Limit (contributions above $19,500, in 2020) made by service members who are deployed to a tax-exempt zone.
The Internal Revenue Code §415(c) states the annual addition limit is per employer. However, for 415(c) purposes, working for multiple Federal agencies or services in the same year is considered having one employer. (This would apply to members of the Guard/Reserves who are also employed by a federal agency, or those who change jobs in a given calendar year).
Two Thrift Savings Plans – Uniformed Services & Federal Service
There are two separate Thrift Savings Plan accounts – one for military members, and one for those employed by the federal government. It is possible for members to have both accounts. This can even be common for members of the Guard or Reserves who also serve as technicians in the civil service.
These two plans share the same annual contribution limits across both accounts. So it is important to understand how to balance having multiple retirement accounts. See the section below, titled, “How Contribution Limits Are Impacted With Multiple Retirement Accounts.”
Uniformed Services TSP Contributions
The Thrift Savings Plan is available to all military members. Military members are eligible to contribute any whole percentage of basic pay, as long as the annual total of the tax-deferred investment doesn’t exceed the maximum contribution limit. Military members also have the option of contributing any portion of their incentive pay, bonuses, or special pay so long as they contribute a portion of their basic pay.
Roth TSP Contributions for TSP members. Roth Thrift Savings Plan contributions are limited to the $19,500 elective deferral limit. All additional contributions toward the Annual Additions Limit must be made into a Traditional TSP account, even if the contributions come from tax-exempt pay.
Tax-free combat zone contributions. Military members serving in tax-free combat zones are allowed to contribute up to $57,000. This total includes regular deferred contributions, tax-exempt combat zone contributions, and special pay and bonuses.
Note regarding catch-up contributions and tax-free pay: Military members who are receiving tax-exempt pay while serving in an eligible combat zone must make catch-up contributions into a Roth Thrift Savings Plan account.
TSP Federal Agency Contributions
Federal Civil Service members can also participate in the Traditional or Roth TSP. They have the same contribution limits. However, the section above regarding tax-free combat zones does not apply.
Matching TSP Contributions Chart
Members of the uniformed services only receive matching contributions if they participate in the Blended Retirement System. Otherwise, they do not receive matching contributions. FERS Employees are eligible for matching contributions from the government.
Thrift Savings Plan participants who are eligible to receive a matching contribution receive an automatic 1% contribution from the federal government, then a 100% match for the first 3% they contribute, followed by an additional 0.5% match for the next 2% the contribute, bringing the maximum agency contribution to 5%.
Participants can contribute as high of a percentage of their salary as they wish, so long as they don’t exceed total contribution limits, including the catch-up limits allowed for those age 50 and above.
The following chart can be used by military members and Federal Employees to determine the total amount of their contributions including agency match.
TSP Matching Contribution Chart
How Contribution Limits Are Impacted With Multiple Retirement Accounts
The TSP is similar to a 401k plan, and they share the same annual contribution limit per person. This means if you cannot contribute more than $19,500 ($26,000 with catch-up contributions) across both accounts in any given calendar year.
This doesn’t impact most active duty members or civil service employees with only one job. However, this is very important to note for anyone who transitions to or from the military or civil service in any given year. And it’s important for traditional members of the Guard and Reserves, as they often have another retirement plan through their full-time job.
Be careful! TSP participants should be careful not to exceed their annual contribution limits across whichever retirement accounts they have. The TSP system will not allow you to contribute too much to the TSP. If you do, the TSP will refund you the difference, and reject future contributions through the end of the calendar year. But the TSP doesn’t have insight into your other retirement accounts.
Military TSP + Federal TSP. Many members of the Guard and Reserves are also Technicians and have access to both a military TSP account and a civil service TSP account. They can make contributions to both TSP accounts in the same tax year. However, these accounts share the same annual limit across both accounts. It’s very important not to exceed these contribution limits.
The only time you can go above the annual employee deferral limit is when you are called to active duty and deploy to a tax-exempt zone. At this point, you will be able to contribute up to the Annual Addition Limit shown above ($57,000, or $63,000 with catch-up contributions).
TSP + 401k (or similar retirement account). Again, the TSP and 401k plans share the same annual limit. In theory, it seems like one should be able to contribute up to the Annual Addition Limit if you have contributed to the maximum allowed between your other retirement account and the TSP. But the TSP won’t be able to track this on their own. So you will need to contact them and verify that it is possible, and request they allow it. Again, this is a theory. I have not seen it in practice.
Other Notes about TSP Contributions
The following information should help you determine how to allocate your TSP contributions:
Contributing by a percentage of your pay.
If you elect to contribute a percentage of pay to the TSP and the amount is more than your remaining salary after mandatory deductions (e.g. Federal income tax, state taxes, TSP loan payments, etc.) and other voluntary deductions that are processed before TSP contributions, then the resulting pay will be the amount withheld and contributed to your TSP account.
Contributing by dollar amount.
If you designate a whole dollar amount that is greater than your remaining salary, then no employee contributions will be made for that pay period, and if you are FERS you will not receive Agency Matching Contributions for that pay period.
If this occurs, you will need to lower your contribution level by electing to contribute either a lower percentage or dollar amount. No TSP contributions will be withheld from your pay until your new election is effective. Neither the new election or any matching contributions will be applied retroactively.
Automatic contributions.
The Thrift Savings Plan offers Automatic TSP Contributions for new employees. The military will also have automatic enrollment for members participating in the blended retirement plan.
Roth TSP. Here is more information about the Roth Thrift Savings Plan (TSP).
The Thrift Savings Plan is a great opportunity to save money for retirement and you should take advantage of it if you are eligible to participate. You can read more about the contribution rules at the TSP page.
Hello Ryan,
Are all TSP contributions to be made from government salaries? In other words, can I divert some funds from a personal trust fund into my TSP as long as I don’t exceed the addition or overall annual TSP limit? I hope you didn’t already address this question and I glanced over it.
Great stuff, thanks so much.
Dear Ryan,
My son is an new Marine just graduated from Boot camp on Jan 31, 2020. I want to know which retirement plan he is eligible participated from military automatically?( because I don’t see his checking account statement showing any contribution payroll deduction for each pay period ), second, where he can set up TSP account with? it seems TSP contribution has to deducted directly from his account. No ideas about how it works. Can you please possible advise? thanks. thanks for taking your valuable time!
New Marine’s Mom
I am now confused about my TSP contributions and annual catch up contributions. For tax year 2018 my tax preparer told me that since my TSP is a retirement account and block 12 of my W2 had an amount in it, it counted as income for the taxable year? This has not occurred in past years. Is this something in the new tax law(s)? I looked at several tax publications and the 1040, am I missing or overlooked something? Are my TSP contributions taxable annually? If so, then why am I saving to be taxed again when I begin to take withdrawals. Isn’t that being taxed twice? I am understanding that this is pretax money? Please cite the reference that you are speaking of for the explanation.
Hello Ryan,
Are there any advantages or disadvantages to selecting different pay to contribute from? For example: contributing 10% from base pay and 3% from special/incentive pay.
Thanks for your help!
Ryan:
Have a complex question that TSP customer service was uncertain of, and hoping you can help.
I am deploying later this year. I am maxing my $19K elective deferral limit contributions before I leave. While there, I will max the remaining $37K annual additional limit. Next year, I will be able to contribute about $24K total before I redeploy.
For next year – will the $24K count against the annual additional limit – because I’m deployed – thus allowing me to still contribute the full $19K elective deferral limit starting once I return home?
Or, since it’s the first $19K for the year, will that max out the standard limit first, making only the remaining $5K or so counting towards the additional limit – thus preventing me from contributing anymore for the year once I return home?
Any insight would rock. Thank you.
Thanks for the update! I was hoping that we could re-visit the question of over-contributing to the TSP. I think this is a topic that doesn’t get enough attention and is certainly not well addressed by either DFAS or the TSP. Many people have stated that they want to max-out their TSP (contributing $18,500 for 2018 and now $19,000 for 2019). The math to get to this point is easy, as you suggest in the post ($1,583.33/month for 12 months). Unfortunately, the myPay contribution interface is not set up to allow members to contribute specific dollar amounts. Instead, we have to figure out the percentage of our pay(s) that gets us closest to that number. Given this setup, there is no possible way to get to the exact contribution limit for the year without going over. You mention in your post that “The TSP system will not allow you to… Read more »
That Podcast is completely useless and incorrect information is presented. Please take it off from here.
Ryan,
I am a reservist, over 50, with both ROTH TSP and a civilian 401K. For 2018, my employer contributed $3,738 to my 401K. I have contributed $9,690 to the 401k and $12,520 to the ROTH TSP. Is my civilian employer’s contrbution included in reaching the $24,500 limit ?
I contributed $3,710.00 over the 2018 $18,500 without designating the $6,000 as catch up. Does the catch up amount over $18,500 require a seperate delegation?
If I violated the limit, what do I do to fix the overage?
If I served 7 years active duty (and I buy those back) and additionally work 3 years for DOD and change jobs (to a non-DOD job) at 58, will I be able to collect a FERS annuity based on 10 years service at the age of 62? Or, have I failed to meet the minimum 5 year period required to be vested? My personnel department is stating that the 5 year minimum must be met however, it would seem to me that once the buyback is paid in full that those years should count. Please let me know.
Thanks…….Pat
Is it possible to roll a 401K into an existing TSP after retirement to consolidate accounts? If not, is it possible to roll the TSP into an IRA? I am nearing retirement and have multiple retirement accounts…TSP, 403b, Roth IRA, SEP IRA, ORP. I’d like to consolidate accounts as much as possible.
Hi Ryan,
Active duty Air Force deployed overseas in tax-free zone in early Sep 2018. I reached my $18.5K limit while CONUS and want to get as close to the $55K limit as possible by the end of the year.
I have my TSP on myPay set to put 92% of my base pay into traditional. However, my Sep checks were just tax-free and nothing additional went into TSP.
Question… do you know if I need to let someone at DFAS know I want to contribute above the $18.5K or should it do it automatically (since I have set on myPay) and I just need to be patient as it works through the system?
I called TSP.gov today and they said they just contribute what DFAS gives them. When I called DFAS, they just forwarded my call to TSP.gov. No help there…
Thanks for any thoughts.
I am retired military and receive a monthly retirement check. Why can’t I make an allotment from my retirement check to my military TSP account? Wouldn’t the government want retired military members contributing to their future financial well being? Maybe we need to have our voices heard to our congress men and women. It would also be a nice benefit that may help keep active duty members for the long haul of 20+ years of service.
Hello Michael,
Is this strategy allowed under TSP rules: I am in the military and deploying to a combat zone for nine months. I want to contribute the max annual addition limit of $55,000. $36,500 of that amount will be allocated to my traditional TSP account of CSI. The remaining $18,500 will be allocated to a Roth TSP and I will contribute an additional $6,000 (catch-up contribution) to the Roth TSP for a total of $24,500.
Mr Guina,
I have been withholding the standard 5% from my biweekly paychecks for my TSP (employer match 5%). I understand the maximum contribution to ANY retirement plan for calendar year 2017 is $18,000 for a single individual under 50 years of age. Is the TSP ROTH separate from a fidelity ROTH IRA? In other words, can i still contribute $5500 to a fidelity ROTH despite having ROTH TSP contributions for the year 2017?
Thank you for your time.
I am doing to short term military deployment to a tax exclusion zone. I want to maximize my TSP contributions during this short time. I prefer the Roth option and would go 100% of all pay, if that were possible. In the past, when Roth TSP first became an option, my first contribution failed on my LES because the percentage was too high to cover federal withholding. The contribution election was allowed, but the TSP contribution was rejected on the subsequent LES. I don’t want to make this mistake now since my deployment is only four pay periods and I want to max the contributions. The question is can BAH, which is not subject to fed withholding, but used to cover the withholding for my taxable income? Or do manage the percentage of my taxable pay, to leave enough to cover withholding? Also, can traditional TSP contributions be rolled over… Read more »
I am currently Active Duty and are considering transitioning to a civilian career but staying in the Reserves. Can I only contribute to the TSP from my reserve pay? Or can I still contribute the max from my civilian pay?
I contribute to my TSP to the max allowed and I have been missing out on the advantages of catchup elections. For the 2017 tax year, can I elect to contribute ($6K) of catch up contributions in the pay cycles in 2018 up April 15 for them to be counted towards the 2017 tax year and then revise my catch-up contribution for my remaining pay cycles in 2018 to max out the $6K for 2018?
“Elective deferral contributions only apply to regular employee contributions that are made in before-tax (i.e., tax-deferred) dollars.”
I am a little confused in the language. For 2017 the Annual Contribution Limit is $18,000 and Annual Addition Limit is $54,000. Can I put $18,000 into my TSP and then put $36,000 into my ROTH TSP since the ROTH contributions are taxed?
Ryan:
Quick question, I miscalculated my deduction from Civil Service and ended up only contributing 17365.00 into my TSP and 5880.00 CUC. I’m an idiot.
Is there a way to top that out prior to April 15th in regards to the 2016 tax year. I have other accounts into which I could move the 635/120 dollars respectively if that helps to generate proof of contribution for the year. If unable, will that cause my CUC not to count for the year. And what sort of chocolate mess can I expect from CS pay/TSP.
Great stuff- I’m finding a common misconception that service members cannot contribute to the TSP and and IRA. This misunderstanding seems especially prevalent with the Roth TSP. People seem to see “Roth” and think “IRA” with the $5500 contribution limit. The most common INCORRECT argument I hear is that you can contribute $5500 to your Roth IRA and $12500 to your Roth TSP!
The TSP’s website and the IRS do not do a good job explaining that you can save the max TSP contribution and contribute to an IRA simultaneously. As you note, the TSP is a deferral of income, whereas a (traditional) IRA deducts from income. These are important points, but they get glossed over because noone can conceive of saving much more that 10% of income, and especially not enough to need to use the TSP and an IRA.
Ryan,
I am a Retired Air Force Member and also a Federal Employee. I am expecting a significant amount of Veteran’s Administration Back Pay for Disabilities sustained while on Active Duty. Can I deposit those funds into my TSP when received?
“Catch-up contributions. Catch-up contributions are only available to those age 50 and above. To make catch-up contributions, you must first contribute the maximum amount of regular employee contributions, for the year, the elect to make catch-up contributions. Your catch-up contributions will stop automatically when you reach the contribution limit or at the end of the calendar year. You will need to elect to make catch-up contributions each calendar year.” Unless this is different than contributions made by FERS employees, the statement above is not correct. You can make regular and catch-up contributions at the same time. You do not need to max out the regular contributions first. I have been doing this for years. This paragraph might better be stated like this. “Catch-up contributions. Catch-up contributions are only available to those age 50 and above. To make catch-up contributions, you must elect to make catch-up contributions each calendar year. If… Read more »
1. I now make 5% Roth only contributions to my TSP.
Is this good enough to receive the 5% matching, or do I need to make the 5% Traditional contributions too?
2. I want to contribute the full $18,000 in 2015 and this is November.
How exactly do I make the extra contribution to reach the maximum allowable – is there a form – do I call somebody – do I mail TSP a check?
I’m a reservist with civilian full-time employment. If I contribute $18,000 to my civilian employer’s 401-k program, can I still contribute to TSP?
Thanks!
Ryan,
I’ve recently started active duty and I have about 10k sitting in my checking account I would like to put into a tsp account. Can I make this lump sum deposit from my checking account into a tsp account?
Ryan, Good Morning.
So for 2015, can I contribute the max of $18K (non-combat pay) to my traditional military TSP, plus another $12K from special pay (Foreign Language Pay) for a total of $30K for the calendar year? Thank you.
Pat
Is the amount that I can contribute to my TSP different if I am stationed in Puerto Rico?
Mikel – TSP is restricted to pay-roll reductions only so REDUX transaction is a no go – IRA (up to yearly limit) and relax in ROTH would seem a possible course to me. Thanks for sharing.
Ryan,
Thank you for all your information. I have a basic question. I understand that you can contribute $51,000 in TSP while deployed and that $17,500 of that can be put into Roth. Here are my questions.
1. Does that mean that while deployed, I can $17,500 in Roth TSP and $33,500 in traditioanl TSP?
2. Will this $33,500 in TSP also reduce my taxable income ON TOP of the tax free salary during deployment.
3. When I return from deployment, if I contribute $51,000K while deployed, can I still contribute more to TSP. In other words, is $51K my total for the year, or is it $51K while deployed and then another $17500 when I get back?
Thanks a bunch and keep up the strong work!
Nate
Can an eligible military member who is also eligible for a 401(k) through a second employer contribute and max out both (which happens to be the same limit of $17,500 + $5500 catch up) or does the max of the two combined need to not exceed the annual limit? Thank you!
Ryan,
Great info on the TSP…. Question regarding a military bonus…
I will shortly be receiving the USAF Pilot Bonus. I would like to make the most of the bonus, while also trying to minimize the tax against it. It’s a $25K bonus. I’ve thought of making a lump sum contribution to the TSP for the year with $17K of the $25K. Does that mean that only $8K will be taxable?
I appreciate your help and all the info you’ve provided on your blog.
JD
Mikel – TSP is limited to payroll deductions only so REDUX payment is a no go – IRA (up to annual limit) and rest in ROTH would seem a possible course to me.
Ryan
Great website!
As the military rolls out the Roth TSP, can the $49,000 earned in a combat zone, be contributed to the ROTH TSP for each calendar year?
Thanks again!
Ryan i have a question can i contribute the whole 30,000 dollars (redux) to TSP ? without penalty with the IRS for tax purposes? let me know, because i am planning to get the redux and invest it to TSP .
I want to change my TSP to roll over into a ROTH or IRA while I am in a tax free zone. I was told I could do this online. However, how do they know I am actually in a tax free zone?
Ryan,
Do you know if the TSP allows military members to make contributions for the previous tax year before the tax deadline as other retirement account types do? For instance, I do not currently have a TSP but am interested in opening one and contributing a lump sum for 2011 contributions in order to reduce my 2011 taxable income while also investing.
Thanks!
Ryan – why does DFAS refuse to let deployed members earning more than the tax free base pay cap make deferred contributions – DFAS insists the first dollars of TSP contributions come from tax free pay! Only if you elect like 100% TSP deduction can I get to my taxable pay!
This seems anti-service member as some of us are trying to lower our AGI so we can enjoy certain deductions and credits.
Unfortunately no change from 2010. But in this low inflation/COLA environment that is not surprising.