Military TSP Question

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RamblinDoc
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Military TSP Question

Post by RamblinDoc » Fri Jan 19, 2018 2:14 am

I'd like to contribute the max to my traditional TSP (already maxing out my Roth IRA). If I overshoot the % contribution a bit, will DFAS be smart enough to stop my contributions once I hit the limit?

I couldn't find any certain information on this.

Fishing50
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Re: Military TSP Question

Post by Fishing50 » Fri Jan 19, 2018 2:27 am

Yes, DFAS will shut down contributions at $18,500, unless you're serving in a tax exempt combat zone.
It's perfectly legal, go ask the IRS, they'll say the same thing. I actually feel stupid telling you this, I'm sure you would've investigated the matter yourself. Andy Dufresne

RamblinDoc
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Re: Military TSP Question

Post by RamblinDoc » Sat Jan 20, 2018 2:33 am

Fishing50 wrote:
Fri Jan 19, 2018 2:27 am
Yes, DFAS will shut down contributions at $18,500, unless you're serving in a tax exempt combat zone.

Thank you. I assumed they would, but couldn’t find it in writing anywhere.

bovineplane
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Re: Military TSP Question

Post by bovineplane » Sat Jan 20, 2018 3:53 am

Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.

Swansea
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Re: Military TSP Question

Post by Swansea » Sat Jan 20, 2018 9:13 am

I left the feds before the Military TSP plan started. My understanding is that some military personnel can get matching monies. If you are eligible for matching monies and assuming that DFAS functions the same as for civilians, hitting your contribution limit too early can cause you to lose matching funds.

Helo80
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Re: Military TSP Question

Post by Helo80 » Sat Jan 20, 2018 9:32 am

Swansea wrote:
Sat Jan 20, 2018 9:13 am
I left the feds before the Military TSP plan started. My understanding is that some military personnel can get matching monies. If you are eligible for matching monies and assuming that DFAS functions the same as for civilians, hitting your contribution limit too early can cause you to lose matching funds.
Correct. The new BRS retirement plan that one has to opt-in to (commissioned/enlisted prior to Dec 31, 2017) allows for matching. Not sure if BRS will true up contributions though.

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grabiner
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Re: Military TSP Question

Post by grabiner » Sat Jan 20, 2018 12:06 pm

bovineplane wrote:
Sat Jan 20, 2018 3:53 am
Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.
Don't let that happen if you are getting a match (under the new Blended Retirement System, or as a civilian under FERS); if you don't contribute in the last pay period, you won't get the match.
Wiki David Grabiner

RamblinDoc
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Re: Military TSP Question

Post by RamblinDoc » Sat Jan 20, 2018 6:48 pm

grabiner wrote:
Sat Jan 20, 2018 12:06 pm
bovineplane wrote:
Sat Jan 20, 2018 3:53 am
Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.
Don't let that happen if you are getting a match (under the new Blended Retirement System, or as a civilian under FERS); if you don't contribute in the last pay period, you won't get the match.
Good to know for those in the new BRS. Thanks!

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blaugranamd
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Re: Military TSP Question

Post by blaugranamd » Sat Jan 20, 2018 9:25 pm

RamblinDoc wrote:
Sat Jan 20, 2018 6:48 pm
grabiner wrote:
Sat Jan 20, 2018 12:06 pm
bovineplane wrote:
Sat Jan 20, 2018 3:53 am
Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.
Don't let that happen if you are getting a match (under the new Blended Retirement System, or as a civilian under FERS); if you don't contribute in the last pay period, you won't get the match.
Good to know for those in the new BRS. Thanks!
Yes. I'm a fellow military physician also enrolled in BRS. You should pull up the FY18 basic pay tables and figure out roughly what percentage of your basic pay you need to equally split the contributions. For me, my time in service raise happens in July (probably same with most physicians) so it's a little bit more complex to calculate, but came out to about 29% base pay to max out in December. Just check where you're at in October/November and adjust your contributions to make sure you're on pace to have at least 5% of your base pay left to max your TSP in December. Happy Matching!
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

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Nords
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Re: Military TSP Question

Post by Nords » Sat Jan 27, 2018 3:20 pm

RamblinDoc, all of the advice you've received in this post is correct, of course, and I've also confirmed the TSP contribution-limit experience with over a dozen readers.

Keep in mind that if you deploy to a combat zone then your TSP contribution limit rises to the annual addition limit ($55K in 2018) but it then includes the DoD BRS matching contributions as well as your contributions. There's a whole bunch of fine print below the contribution limit table on the TSP website:
https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/contributionLimits.html
Several of my readers (and an Air Force blogger) are making those $55K/year contributions now.

If you're seeking specific details and the links to the federal law, you can read DoD's "fascinating" BRS implementation memo:
http://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/Combined%20BRS%20Policy%20Document.pdf?ver=2018-01-02-105828-370
This can win you a lot of bar bets over the matching contributions.
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