Updates to Thrift Savings Plan coming in 2021
By Sixteenth Air Force Public Affairs, Sixteenth Air Force Public Affairs
/ Published December 17, 2020
JOINT BASE SAN ANTONIO-LACKLAND, Texas --
Each year, the Internal Revenue Service places limits on the dollar amount of contributions that can be contributed to the Thrift Savings Plan, or TSP. For 2021, the annual elective deferral and catch-up limits remain from 2020.
Additionally, on Jan. 1, 2021, TSP will implement a new method for catch-up contributions called the "spillover" method. The spillover method will streamline the catch-up process and means that eligible participants who are turning 50 years or older will no longer have to make separate catch-up contribution election.
For 2021, the elective deferral limit is $19,500. The Internal Review Code (IRC) 414(v) catch-up contributions limit for 2021 is $6,500. Amounts beyond the elective deferral of $19,500 will automatically spill over toward the catch-up limit for those who are 50 or older and for those turning 50 in the calendar year beginning January 2021.
As a result of this new "spillover" method, age-eligible participants who contribute the maximum amount of contributions allowed under the elective deferral limit and make catch-up contributions can contribute up to $26,000 (combined total of traditional (tax-deferred) and Roth contributions) in 2021 to their TSP accounts. Contributions spilling over toward the catch-up limit will be matched, but only up to 5 percent which participants are already entitled.
For more information regarding TSP or Catch-up contributions, visit myPers at https://mypers.af.mil/app/answers/list/st/5/kw/49443/p/2/page/1/search/1.