TSP contribution cap to increase to $17K

In 2012, you will be able to contribute up to $17,000 to your Thrift Savings Plan. That’s $500 more than what you can currently put in.

The cap is the tax deferred amount you can put into your TSP each year, said Tom Trabucco, director of external affairs at the Federal Retirement Thrift Investment Board, in an interview with In Depth with Francis Rose.

The Internal Revenue Code puts limits on contributions based on calculations that can change each year, according to the website. However, the current limit of $16,000 has not changed since 2009.

As of 2008, nearly 7 percent of FERS employees and 11 percent of CSRS employees contributed the maximum amount, Trabucco said.

Trabucco reminded federal employees to not “run out of room” in contributions at the end of the year. Agencies give a 5 percent match each pay period, so federal employees should take care not to “overcontribute at the beginning of the year,” he said.

Federal News Radio’s Jared Serbu is fill-in anchor for Francis Rose today.