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- Introduction
- Elective Contributions
- Elective Deferral Limits
Each year the IRS determines the maximum amount you can contribute to tax-deferred savings plans like the TSP. This is known as the IRS elective deferral limit. Participants should use this calculator to determine the specific dollar amount to be deducted each pay period in order to maximize your contributions and to ensure that you do not miss out on Agency or Service Matching Contributions if you are entitled to them.
All fields are required to use this calculator.
What information do you need to use this calculator?
- Your most recent Leave and Earnings statement or payslip.
- The number of salary payments you have left for the year.
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Participants turning age 50 or older are eligible for catch-up contributions. We’ll take that into account when calculating how much you can contribute.
Special Note for FERS and BRS Participants
This calculator is especially important for FERS employees and members of theuniformed services covered by the Blended Retirement System (BRS). Read the fact sheet Annual Limit on Elective Deferrals to find out what happens if you exceed the elective deferral limit.
The dollar amount determined by using this calculator distributes your employee/member contributions over the entire year (or remainder of the year), and thus allows you to receive the maximum Agency or Service Matching Contributions.
Sure thing! The article you provided revolves around retirement savings plans and the IRS elective deferral limit, specifically focusing on the Thrift Savings Plan (TSP) and how participants can maximize their contributions within these limits.
The IRS sets the maximum amount individuals can contribute to tax-deferred savings plans annually, known as the elective deferral limit. To ensure individuals make the most of their contributions and don't miss out on potential matching contributions from their employer, there's a calculator mentioned that aids in determining the specific amount to be deducted from each pay period.
Key information required to use this calculator includes:
- Most Recent Leave and Earnings Statement or Payslip: This provides details about your current salary and deductions.
- Number of Salary Payments Left for the Year: Understanding how many pay periods remain helps in calculating contributions accurately.
The calculator takes into consideration whether you'll turn 50 or older in the year as individuals in that age bracket become eligible for catch-up contributions.
The article emphasizes the importance of this calculator, especially for Federal Employees Retirement System (FERS) employees and members under the Blended Retirement System (BRS). It ensures contributions are distributed evenly throughout the year to maximize Agency or Service Matching Contributions.
Understanding the elective deferral limit, catch-up contributions for older individuals, and the significance of properly distributed contributions throughout the year are crucial components of effective retirement planning within the framework of IRS regulations.
