Serving Clovis, Portales and the Surrounding Communities
Serving Clovis, Portales and the Surrounding Communities
Air Force News Service
RANDOLPH AIR FORCE BASE, Texas — The Federal Retirement Thrift Investment Board recently announced an increase in the 2009 elective deferral limit for regular Thrift Savings Plan contributions.
The limit is now $16,500, up from $15,500 for 2008.
In addition, contributions for the TSP catch-up plan will increase to $5,500, up from the $5,000 limit set for the last three years.
“TSP is a long-term retirement savings plan, which everyone should consider,” said Fran Campbell, a human resources specialist at the Air Force Personnel Center here. “It’s a great supplement to military and civilian retirement plans.”
The plan gives investors the opportunity to lower their taxes each year they contribute. The taxes are deferred until the employee withdraws from the account after retirement.
“Investment money is deposited directly from each paycheck, so you never have to think about it. That makes it easy to ‘pay yourself first’ while only investing what you deem appropriate,” Campbell said.
She also said that investing in TSP is not limited to just stocks.
“People can choose safer government securities or invest in the lifecycle funds,” Campbell said.
Catch-up contributions are additional tax-deferred contributions and are separate from regular TSP contributions. For those who are eligible, catch-up contributions provide a way for individuals to secure their retirement if they began investing later in their careers.
To be eligible for catch-up contributions, civilian and military employees must be age 50 or older in the year in which the first deduction from pay occurs. They must also be in a pay status and be able to certify they will make, or have made, the maximum “regular” employee contributions of $16,500 to a TSP or other eligible account by the end of 2009. Other eligible accounts include uniformed services TSP accounts or other eligible employer plans, such as 401Ks. To be eligible, employees cannot be in the six-month, non-contribution period following a financial hardship in-service withdrawal.
Catch-up contributions automatically stop with the last pay date in the calendar year or when the maximum catch-up dollar limit for the year is reached, whichever comes first. Eligible employees must submit a new election for each year they wish to participate.
Regular TSP contributions stop when an employee’s contributions reach the annual maximum limit and then automatically resume the next calendar year.
