December 19, 2017 at 6:00 AM
Question: It looks as though we’re going to get about a 2 percent raise in January. Will my Thrift Savings Plan investment amount increase automatically?
Answer: It depends on whether you are investing by dollar amount or by percentage of salary. If you’re a dollar-amount investor, the withholding per biweekly pay period stays the same unless you change it. If you’re investing by percentage of salary, the amount rises automatically when your salary increases.
There’s a special consideration for those under the Federal Employees Retirement System who invest at or near the annual maximum, which will rise in 2018 to $18,500 from $18,000. They must make sure they can continue investing at least 5 percent of salary through every pay period of the year. If they hit the limit before that, matching contributions from the government of up to 4 percent of salary will stop until the next year. That’s leaving money on the table, money they’ll never get back.
However, they still would receive the 1 percent of salary automatic contribution the government makes into the TSP for all FERS employees.
Those under the Civil Service Retirement Systems get no employer contributions, so that’s not a consideration for them.