Is it possible to over contribute to TSP?

[Blue456]

Is it possible to over contribute to TSP or will the software/HR automatically limit contribution to $22,500? Please note I did not contribute to any other 401k.

[Rager1]

If you are contributing the max to TSP, one way to over contribute is to take a loan. The interest paid on the loan goes back into the TSP on your behalf.

However, you have to sell something within the TSP to fund the loan.

Ed

[dukeblue219]

Is it possible to over contribute to TSP or will the software/HR automatically limit contribution to $22,500? Please note I did not contribute to any other 401k.

Yes, your contributions will cease upon reaching your limit for the year.

[nps]

If you receive matching contributions, the bigger issue would be reaching the max before your last paycheck of the year. If you did that you would forfeit the match on your remaining paychecks.

[Swansea]

If you stop contributing too early, you risk losing the TSP match...unless things have changed since I left in 2005.

[Navillus1968]

The TSP will stop your contributions at $22.5k, so there's zero risk of over-contributing.
However, as noted by Swansea, you risk losing most of the 5% matching funds if your reach the IRS limit too early. I think you are entitled to the 1% Agency/Service Automatic Contributions whether your contributions are halted or not, but you will definitely lose the additional 4% Matching Contributions if your own contributions have stopped.

It's not a huge amount of money (4% is about $154 per pay period for a nominal $100k salary), but it sucks to lose out on free money if you don't have to.

If you are approaching $22.5k, you should change your deferral amount to no more than $865 per pay period ($22,500/26 pay periods in 2023) or less, to avoid losing the match in December.
Note that the TSP may take 1 or 2 pay periods to process your change request, so I would act ASAP..

[rkhusky]

Note though that your payroll office doesn’t know about other 401k-like contributions that you might have made during the year.

[Swansea]

Also, to maximize, you need to adjust amount when there is a 27th pay day.

[Blue456]

If you are approaching $22.5k, you should change your deferral amount to no more than $865 per pay period ($22,500/26 pay periods in 2023) or less, to avoid losing the match in December.
Note that the TSP may take 1 or 2 pay periods to process your change request, so I would act ASAP..

This is what happened to me last year. I changed my contribution to $865 but it took 2 pay periods to get this changed. So right now I am going to contribute $22,480 instead of full $22,500. So I guess it won't hurt at this point to change contribution to $885.

[Navillus1968]

If you are approaching $22.5k, you should change your deferral amount to no more than $865 per pay period ($22,500/26 pay periods in 2023) or less, to avoid losing the match in December.
Note that the TSP may take 1 or 2 pay periods to process your change request, so I would act ASAP..

This is what happened to me last year. I changed my contribution to $865 but it took 2 pay periods to get this changed. So right now I am going to contribute $22,480 instead of full $22,500. So I guess it won't hurt at this point to change contribution to $885.

$20 is a rounding error!
That said, probably a good idea to slightly dial down your deferral amount.

[Late2Brake]

deleted

[nps]

My HR stops it automatically. Check too see where you company matches your contribution. Mine will match on 401K, Roth 401K and on after tax contributions. So if I payed my 22,500 early, I can continue to get the match on after tax contributions.

The OP is asking about the TSP. There are no after tax contributions, and they will not match without an employee making contributions in that pay period.

[Dantes808]

My agency kicked it back when I went over by a few dollars a couple of years ago. No other issues.