The standard limit on investments will rise from $18,500 to $19,000 in 2019 in the Thrift Savings Plan for federal employees along with similar retirement savings plans such as 401(k)s, the Internal Revenue Service announced Thursday.
A separate limit on “catch-up contributions” allowed for those ages 50 and older, meanwhile, will remain $6,000.
Almost all federal employees have a TSP account, because one is established automatically for everyone hired into the Federal Employees Retirement System, which applies to those hired since 1983.
Of the nearly 2.6 million — including U.S. Postal Service workers — under that retirement program, nearly 180,000, about 7 percent, hit the investment maximum in 2017 of $18,000, TSP figures show. Of those, 122,000 were 50 or older, and of that group, nearly 79,000 invested the additional maximum $6,000.
The average account for a FERS-covered employee was $145,000 as of August. The government contributes an amount equal to 1 percent of their salary annually regardless of whether the employee personally invests. Those under FERS who invest personally are eligible for matching contributions of up to another 4 percent of salary. Government contributions don’t count toward the investment maximums.
All but about a 10th of FERS employees make personal investments, with an average investment rate of nearly 8 percent — more than enough to capture the maximum government match.
Those under the older Civil Service Retirement System, which now covers only about 5 percent of federal workers, may invest up to the same dollar maximums, but they get no employer contributions. The average account balance for them was just above $150,000 as of August.
The TSP also is open to military personnel, with the same limits applying.
Federal and military personnel can keep their accounts open after retirement, but retirees may not make new investments. In all, about 5.3 million people have TSP accounts, holding $579 billion as of September.