The Internal Revenue Service has announced 2022 Thrift Savings Plan (TSP) contributions limits. The maximum amount you can contribute is $20,500. If you are age 50 and older, you can make an additional $6,500 catch-up contribution as well.
The IRS bases Thrift Savings Plan contribution limit adjustments on the cost-of-living index and IRS regulations. The new TSP limits take effect on the first calendar day of the new year, Jan. 1, 2022.
2022 Thrift Savings Plan Contribution Limits
|Elective deferral limit||$20,500||$19,500||IRC §402(g)||The Elective deferral limit applies to the combined total of traditional and Roth contributions. For members of the uniformed services, it 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.|
|Annual addition limit||$61,000||$57,000||IRC §415(c)||An additional limit imposed on the total of all contributions made on behalf of an employee in a calendar year. This limit is per employer and includes employee contributions (tax-deferred, after-tax, and tax-exempt), agency/service automatic (1%) contributions and matching contributions. For 415(c) purposes, working for multiple federal agencies and/or services in the same year is considered having one employer.|
|Catch-up contribution limit||$6,500||$6,500||IRC §414(v)||The catch-up contribution limit is the The maximum amount of catch-up contributions that can be contributed in a given year by participants aged 50 and older. It is separate from the elective deferral and annual additions limit imposed on regular employee contributions.|
The Thrift Savings Plan is a retirement option for federal employees and military members, providing similar tax breaks and savings to those offered in the private sector under 401(k) programs. There is a traditional TSP and a Roth TSP option. While some may choose simple, straightforward retirement plans, others may prefer more complex arrangements, taking advantage of both traditional and Roth TSPs.
Thrift Savings Plan Contribution Limits: Elective Deferral Limit
The 2022 elective deferral limit is $20,500, which is a $1,000 increase from 2021.
The $20,500 limit is applicable to the combined total of your contributions to Roth and traditional TSP programs.
Service members cannot contribute $20,500 to each program. The limit indicates the amount you can contribute to one or both.
This limit “includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay and bonus pay,” according to the Thrift Savings Plan, a retirement savings and investment plan for federal employees and members of the uniformed services.
However, the 2022 limit is not applicable to “traditional contributions made from tax-exempt pay earned in a combat zone.”
Thrift Savings Plan Contribution Limits for: Annual Addition Limit
For 2022, the annual additions limit increased to $61,000 ($1,000 more than in 2020).
If you’re under 50 years old, that is the total amount you may contribute in 2022 across all retirement funds. It includes employer contributions, matching contributions, agency contributions and automatic contributions.
The annual additions limit is per employer. As long as the employee is working for a federal agency, they are considered to have one employer for the purposes of calculating the limit. (So if you also contribute to a 401k or other employer plan, you could accidentally exceed this limit).
Thrift Savings Plan Contribution Limits: Catch-up Contribution Limit aka Spillover Method
The catch-up contribution limit for employees and uniformed service members aged 50 or older is listed as $6,500 for 2021, which remains unchanged this year. The limit imposed on catch-up contributions is separate from the elective deferral and annual additions limits.
Spillover Method Updates
Starting Jan. 1, 2021, the TSP will no longer use Form TSP-1-C, TSP-U-1-C or the special payroll records that designate contributions as catch-up. Participants will no longer make separate catch-up elections in their electronic payroll systems either.
Employing agencies and services will submit catch-up contributions on the same payroll records used to submit the equivalent record for regular contributions. Those contributions will continue until catch-up eligible participants reach the combined elective deferral and catch-up limits for the year.
What Military Members Need to Know About Roth TSP Contributions
Roth TSP contributions are subject to the elective deferral limit, regardless of whether such contributions are from taxable or tax-exempt pay.
If you want to contribute tax-exempt pay toward the annual additions limit, you are required to choose the traditional TSP option.
If you are eligible to make catch-up contributions and are drawing combat-zone tax-free pay, you can not make a catch-up contribution to a traditional TSP, you must make it to the Roth TSP instead.
Rules for Members of The Ready Reserve Contributing to a Military AND a Civilian TSP
If you are in the Ready Reserve and contribute to both military and civilian TSP accounts, your contributions are limited based on the total amount of your 2022 contributions to both types of TSP accounts.
Furthermore, if you are a reservist who is placed on active duty and elect to make tax-exempt combat-zone pay contributions to your TSP, you are subject to the same annual additions limits. Having both the TSP and a civilian plan does not exempt you from the annual limits.
Who is Eligible to Contribute to the TSP?
Federal government employees (both military and civilian) are eligible to open and contribute to a Thrift Savings Plan. In general, applicants must be:
- Federal Employees’ Retirement System (FERS) employees hired on or after Jan. 1, 1984
- Civil Service Retirement System employees hired before Jan. 1, 1984 who did not choose to convert to FERS
- Members of the U.S. military
- Civilians listed as working in “certain other categories” of federal government service
Only those listed as full- or part-time employees may contribute to TSP.
If you had a break in service with the federal government, you will either have your original TSP account contributions resumed once you’re rehired or you will be automatically enrolled in a new TSP.
Whether you resume or get a new account depends on whether 31 days have elapsed between the end of federal employment and resumption of it. If you were not enrolled in the TSP before leaving government employment, you will not be automatically enrolled when you return.
Thrift Savings Plan Contribution Limit History
|Year||Annual Contribution Limit||Max Catch-Up Contribution Limit||Annual Addition Limit||Annual Addition + Catch-Up|
|Blended Retirement System||Blended Retirement System FAQ|
|Blended Retirement System: Guard, Reserves||Which Retirement System Should I Choose?|
|Military Retirement Calculators||Thrift Savings Plan|