In this episode of theSITREP, Paul covers whether you are able to make retro-active contributions to Thrift Savings Plan. Paul is joined by U.S. Air Force Veteran, Mike Jerue, who serves as the Deputy Chief Investment Officer at Thrift Savings Plan.
Listen to the complete Thrift Savings Plan Podcast here:
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ADDITIONAL THRIFT SAVINGS PLAN VIDEOS
What is Thrift Savings Plan
Pension vs. Thrift Savings Plan
Contributions with Thrift Savings Plan
Thrift Savings Plan After Government Service
How to Set-Up Your Thrift Savings Plan
IRA & Thrift Savings Plan Contributions
Thrift Savings Plan Beneficiaries
Thrift Savings Plan Contributions After Service
Roth vs. Traditional Thrift Savings Plan
IRA vs. Thrift Savings Plan
403b vs. Thrift Savings Plan
Thrift Savings Plan Rollovers
Are TSP Contributions Tax Deductible
401k, 457 & 403b vs. Thrift Savings Plan
TSP Maximum Contributions
Individual Funds (G, F, C, S, I Fund) & TSP
TSP L Funds
TSP Retirement Calculators
Roth vs. Traditional Withdrawals
How to Change TSP Contribution Amounts
Thrift Savings Plan Loans & Withdrawals
Age to Withdraw TSP
Thrift Savings Plan Vesting Period
(RMDs) Required Minimum Distribution & TSP
TSP After DoD Service
TSP Company Holdings
Thrift Savings Plan DoD Rollover
How to Access Thrift Savings Plan
Retroactive Contributions to TSP
Catch-Up Contributions with TSP
Changing Contributions with TSP
Thrift Savings Plan Mutual Funds
THRIFT SAVINGS PLAN TOPIC LINKS
For TSP overview, visit:
For TSP contributions, visit:
For TSP L Funds, visit:
For TSP investment funds, visit:
For TSP rollovers, visit:
For TSP holdings of companies, visit:
For TSP mutual fund window, visit:
For TSP annuity, visit:
For TSP required minimum distribution (RMD), visit:
For TSP loans, visit:
For TSP hardship withdrawals, visit:
For TSP death benefits, visit:
#theSITREP #TSP #AnnieVA…(read more)
LEARN MORE ABOUT: Thrift Savings Plans
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TSP Retroactive Contributions: What You Need to Know
The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and members of the uniformed services. It offers participants an opportunity to save for their future through various investment options. One notable feature of TSP is the ability to make retroactive contributions, allowing individuals to make up for missed contributions from previous years.
Retroactive contributions allow TSP participants to make contributions for the years in which they were eligible to participate but did not contribute the maximum allowable amount. This feature is particularly beneficial for those who have recently learned about the advantages of TSP or have experienced changes in their financial situation.
To make retroactive contributions, TSP participants must meet certain criteria. First and foremost, they must have been eligible to contribute to TSP for the years in question. Retroactive contributions are only allowed for years in which an individual was eligible but did not reach the maximum contribution limit.
The maximum contribution limit varies each year and is set by the Internal Revenue Service (IRS). For 2021, the maximum contribution limit is $19,500. If a participant did not contribute the maximum amount in previous years, they have the opportunity to catch up and make retroactive contributions.
It is important to note that TSP retroactive contributions are subject to specific rules and limitations. Participants can only make retroactive contributions for a maximum of three calendar years. For example, if you are making retroactive contributions in 2021, you can only go back as far as 2018. Additionally, the total retroactive contributions, including any applicable earnings, should not exceed the IRS contribution limits for the years being addressed.
To make retroactive contributions, TSP participants need to submit Form TSP-1, “TSP Election Form,” to their payroll office. This form allows individuals to specify the amount they wish to contribute for each year and indicates whether the contributions should be made as pre-tax or Roth contributions.
Making retroactive contributions offers several advantages. Firstly, it provides an opportunity to boost retirement savings and take advantage of the long-term benefits of compound interest. By making up for missed contributions, individuals can potentially accumulate a larger nest egg for retirement.
Secondly, retroactive contributions also offer potential tax advantages. Contributions made to TSP are tax-deferred, meaning that they are deducted from taxable income. By making retroactive contributions, participants can potentially lower their taxable income and reduce their tax liability for the years in question. This can be particularly beneficial for individuals who expect to be in a lower tax bracket during the years they missed contributions.
However, it is important to carefully consider the financial implications of retroactive contributions. Participants should assess their overall financial situation, including any outstanding debts or immediate financial needs, before deciding to make retroactive contributions. It may be more advantageous to prioritize other financial goals, such as paying off high-interest debt or building an emergency fund, before making retroactive contributions.
In conclusion, TSP retroactive contributions offer a valuable opportunity for participants to make up for missed contributions and boost their retirement savings. By taking advantage of this feature, individuals can potentially accumulate a larger nest egg and lower their tax liability. However, it is crucial to carefully evaluate personal financial circumstances before deciding to make retroactive contributions and consider seeking advice from a financial professional if needed.
Retroactive Contributions to the Thrift Savings Plan (TSP) – A Comprehensive Overview | theSITREP appeared first on Inflation Protection.
