TSP Contributors, Check Your Contribution Amounts

TSP Contributors, Check Your Contribution Amounts
designer491/Getty Images

This article is directed at current contributors to the Thrift Savings Plan (TSP) for whom the Defense Finance and Accounting Service (DFAS) is your pay administrator.

 

Due to a mistake in a software update, some members under age 50 may accidentally contribute too much to their TSP if they are trying to max out the plan at the $19,500 contribution limit.

 

Contributions from regular pay are limited to $19,500 for members below age 50 and $26,000 for members aged 50 and over.

 

Typically, DFAS cuts off contributions at the annual contribution limit. However, this year the limit amount for contributors age 50 and up, $26,000, is also being used for members below age 50 — that's the software mistake.

 

[RELATED: 8 Ways to Steer Clear of Financial Trouble in Retirement]

 

If you are younger than 50 and contributing to the $19,500 max, you could accidently contribute over the limit. The pay system will not cut you off at $19,500 as it normally would.

 

Get a jump on the issue. Check your payroll deductions to the TSP. Adjust to ensure by the end of December you won’t go over the $19,500 limit. Also adjust to ensure your contributions will receive the max-matching contributions if you are under the Blended Retirement System. Get with your finance office if you run into any problems or have questions.

 

You should be hearing of this from your leadership and in your base communications to help in your planning. DFAS is monitoring the situation and claims it will return excess contributions to impacted members. A permanent fix is expected in October.

 

MOAA's Financial Planning Guide

MOAA PREMIUM and LIFE Members can get advice and insights on how to navigate life’s critical decisions.

DOWNLOAD NOW UPGRADE FOR ACCESS

About the Author

Lt. Col. Shane Ostrom, USAF (Ret), CFP®
Lt. Col. Shane Ostrom, USAF (Ret), CFP®

Ostrom retired from the Air Force in 2000 and joined the MOAA team in 2006. His responsibilities include researching and answering member inquiries regarding military benefits, health care, survivor issues, and financial concerns.