Author Topic: Maximizing Deployed TSP Contributions with a Civilian 401k  (Read 73 times)

Wings5

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Maximizing Deployed TSP Contributions with a Civilian 401k
« on: August 08, 2018, 10:23:05 AM »
I work a civilian job and serve in the reserves as well. Iím trying to maximize my retirement contributions at both jobs. My employer matches 100% of my 401k contributions to 10%. Iím opted into the Blended Retirement System (BRS), and contribute 5% there to get a 5% match.

I will have tax-exempt combat pay this year and Iíd like to exceed the $18,500 elective deferral limit. Does anyone have experience with the mechanics of this? I'm curious what the W-2 looks like from DFAS.

This is what Iíd contribute this year if I donít change anything. I've planned it so I hit $18,500 on the mark.

Civilian job   

$16,500 contribution      
$16,500 company match
$22,000 company profit sharing
      
$55,000 civilian total  (1st annual addition limit met)

Reserves          

$2,000 contribution      
$2,000 match

$4,000 military total ($51,000 remaining on 2nd annual addition limit)
                                       
$18,500 total elective deferrals (elective deferral limit met)

Iím trying to figure out how much tax advantaged space I have available while in the combat zone, since Iíd like to up my contributions. Those (traditional, tax-exempt combat pay) contributions count towards the $55,000 annual contribution limit, and that limit is per employer according to IRC 415(c). 

Using the above math:
  • Iíve maxed out my elective deferrals at $18,500.
  • Iíve used up $4,000 towards the (separate) $55,000 limit for the reserves.
  • Conclusion . . . I should have $51,000 of space to make traditional contributions from the TSP from tax-exempt combat pay. Since those contributions are well above the 5%, the DFAS computers would not match any of it, so there's no threat of going over there.

Question 1 - Is this all correct? Am I missing anything? There's a ton of tax advantaged space in this scenario, right?
Question 2 - If itís correct, how does the reserves / DFAS W-2 show a breakdown of contributions that count towards the $18,500 elective deferral limit, and contributions that count towards the $55,000 annual addition limit? I believe it's a Box 14 code E amount that shows deployed TSP contributions.

If anyone has maxed out their TSP while deployed, Iíd love to hear from you. I'm trying to share this with a wider audience who've asked me to look into it.

Thanks in advance for any help!