The IRS increased the cap on individual contributions to $18,000 for 2015.
The Internal Revenue Service has increased the cap on annual individual contributions to employer-sponsored retirement savings plans, including the Thrift Savings Plan, to $18,000 for 2015.
The increase, which tracks changes in the cost-of-living index, is the first since 2013, when the cap rose to $17,500 from $17,000. The limit applies to the combined total of contributions to traditional and Roth accounts. For military service members, the cap includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay and bonus pay, but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone.
Employees age 50 and older are eligible to contribute an additional $6,000 starting in 2015 -- up from $5,500 in 2014 -- in catch-up contributions. So their individual contributions cannot exceed $24,000 for the year. Those interested in catch-up contributions need to make a separate election request for that option.
Once employees enrolled in the Federal Employees Retirement System hit their individual contribution cap, agency matching contributions are suspended for the remainder of the year. The agency’s automatic contribution of 1 percent, however, continues even when individual and agency matching contributions are suspended.
For 2015, the limit for the total amount of all TSP contributions on behalf of an employee -- individual, agency automatic and matching -- is $53,000, up from $52,000 in 2014.
Here’s a fact sheet that the TSP released in 2013 with frequently asked questions regarding annual TSP contribution limits.
(Image via Andrey_Popov / Shutterstock.com)