Thrift Savings Plan (TSP) Q&A

[Jughead]

THREAD REVIVAL

Sorry if this has been answered elsewhere, but this thread is the closest my search found.

I'm headed off to the desert in a few months. It's my intention to max out the TSP (or come as close as possible). It's been so long since I deployed that there were still limits on percent of base pay that could be contributed. Nowadays, making all categories 100% would seem to be the way to achieve the max....

HOWEVER, I see the following statement on all my LES's: "IF TSP ELECTION AMT EXCEEDS NET AMT DUE, TSP WILL NOT BE DEDUCTED." I'm not really sure what that means. I *think* what it's telling me is that if the TSP contribution (calculated based on the percentages I set) would result in a negative number after all my other deductions, then the whole contribution is cancelled. Yes/no?

If that's true, my thinking is that so long as my non-TSP eligible pay (BAH, BAS) exceeds all my deductions (FITW, FICA, SGLI, any allotments I may have), that I don't need to worry about this. Yes/no?

If not, then I want to get my arms around how it works, so I don't end up missing a month or more opportunity to contribute.... Thanks!

Edited March 11, 2009 by Jughead

[abmwaldo]

Finance Guy -

Re: SDP

Just making sure I understand this correctly; 30 days into the deployment I can cut SDP a check for $10,000 and then it will garner interest on that $10k?

Will that interest, as it exceeds the $10k cap, be automatically deposited into my regular military pay?

Or can I put as much money as I can afford in there (i.e. I deposit $20k and garner interest on that) and anything over that $10k cap be placed back into my military pay the following month?

[Toro]

Re: SDP

Just making sure I understand this correctly; 30 days into the deployment I can cut SDP a check for $10,000 and then it will garner interest on that $10k?

Will that interest, as it exceeds the $10k cap, be automatically deposited into my regular military pay?

Or can I put as much money as I can afford in there (i.e. I deposit $20k and garner interest on that) and anything over that $10k cap be placed back into my military pay the following month?

I don't know whether you are allowed to put in more than 10K, but you don't earn interest off anything above $10K, so there is no need to put in more than that.

Any interest above the cap is not automatically deposited back into your regular pay - you need to go to mypay and request an SDP withdrawal of interest accrued that puts your balance over 10K.

If that's true, my thinking is that so long as my non-TSP eligible pay (BAH, BAS) exceeds all my deductions (FITW, FICA, SGLI, any allotments I may have), that I don't need to worry about this. Yes/no?

Sounds right, but I've never seen that statement about net amount due before.

[abmwaldo]

Is the SDP something you've used in the past Toro?

I'd like to buy a house in the next year or so and I will need access to this money and it seems as though I can earn a much better interest rate while retaining access than say a conventional CD/MMA. Not to mention the USAA account it's sitting in currently isn't earning nearly as much.

[Jughead]

Is the SDP something you've used in the past Toro?

I'd like to buy a house in the next year or so and I will need access to this money and it seems as though I can earn a much better interest rate while retaining access than say a conventional CD/MMA. Not to mention the USAA account it's sitting in currently isn't earning nearly as much.

Waldo, I've used it in the past. Doesn't quite work the way you've described. As FG said earlier in the thread, your deposits are "disposable income"--in other words, comes from your pay. If memory serves [it's been a long time], it's "unallotted base pay" that defines the limit. You can "write a check," but only for up to that amount. That comes into play in your first month of depositing--once day 30 hits, your monthly limit applies for the current calendar month. So, if you've already received your MM pay (i.e., you arrived in theater in the second half of the previous month, so 30 days later you're in the second half of the current month), you need to supply the funds (up to the limit) from another source. After that, paying into the USSDP via allotment is easiest.

The "access" question is an "it depends" situation--you can't get the money out (except interest that puts the balance above $10K) until *after* you redeploy. If that works for your timing, great, but that's no different from getting a CD that matures in the timeframe you need. I agree, though--where else are you gonna got 10% these days?? The account will keep earning interest (@ 10%) up to three months after you leave the CZTE. No money comes out until you ask for it--in other words, it will sit there, dormant, until you withdraw it.

Second disclaimer: this is from memory, it's been a while. FG can probably fill in any gaps.

[Finance_Guy]

THREAD REVIVAL

Sorry if this has been answered elsewhere, but this thread is the closest my search found.

I'm headed off to the desert in a few months. It's my intention to max out the TSP (or come as close as possible). It's been so long since I deployed that there were still limits on percent of base pay that could be contributed. Nowadays, making all categories 100% would seem to be the way to achieve the max....

HOWEVER, I see the following statement on all my LES's: "IF TSP ELECTION AMT EXCEEDS NET AMT DUE, TSP WILL NOT BE DEDUCTED." I'm not really sure what that means. I *think* what it's telling me is that if the TSP contribution (calculated based on the percentages I set) would result in a negative number after all my other deductions, then the whole contribution is cancelled. Yes/no?

If that's true, my thinking is that so long as my non-TSP eligible pay (BAH, BAS) exceeds all my deductions (FITW, FICA, SGLI, any allotments I may have), that I don't need to worry about this. Yes/no?

If not, then I want to get my arms around how it works, so I don't end up missing a month or more opportunity to contribute.... Thanks!

Are you kidding me? You are asking this question after giving me a few spankings on my answers on the same subject and your keen advice to others. Starts about here: https://www.flyingsquadron.com/forums/index...st&p=198540

Net pay is what you bring home. So if you bring home $2,000 a paycheck as net every payday, then $4k is all you can put towards TSP (assuming twice a month paydays). If your TSP amount exceeds the $4k, then the system will not deduct anything for TSP. Kind of like a check bouncing.

Edited March 12, 2009 by Finance_Guy

[Finance_Guy]

Finance Guy -

Re: SDP

Just making sure I understand this correctly; 30 days into the deployment I can cut SDP a check for $10,000 and then it will garner interest on that $10k?

Will that interest, as it exceeds the $10k cap, be automatically deposited into my regular military pay?

Or can I put as much money as I can afford in there (i.e. I deposit $20k and garner interest on that) and anything over that $10k cap be placed back into my military pay the following month?

The max that will draw interest is $10K--you can put in $20K, but only $10K will draw interest--unless you are in a "missing" status. If you normally have $10,000 in disposable income every month, then you could lay out a check after the first 30 days. But most can't do that. Make your first deposit after 30 days for up to your max unallotted pay, then be sure to come in at your 60 day point and write another check for the same amount or whatever is needed to max out the $10K. Wash, rinse, repeat. The minimum deposit is $5.00 with all deposits to be made in multiples of $5 --do not forget this! Also be sure to get your deposit made before the 10th of the month, if you don't then you lost 1 month of interest.

I highly recommend setting up an allotment due to all the horror stories I've seen when checks are written. There are a few various transactions and postings that have to occur and chance for error increases over an allotment. The only deal with the allotment is you must monitor the balance and request the allotment be stopped.

Interest accrued. Well the SDP isn't ran like a bank. The interest isn't even computed until you send in a request for withdrawal or the 120 days has past since the last day of the month you departed the eligible SDP area. DFAS computes it all at the time of withdrawal. However, if you have maxed out the $10K total you can contribute, then you can request the interest earned every quarter using myPay, or not. If you do not request the withdrawal by 120 days after, then DFAS will automatically send your withdrawal.

Check out all the details here: https://www.defenselink.mil/comptroller/fmr/07a/07a_51.pdf

No money comes out until you ask for it--in other words, it will sit there, dormant, until you withdraw it.

Second disclaimer: this is from memory, it's been a while. FG can probably fill in any gaps.

Fairly accurate Jughead, but I can Bzzzt you on the above--remember that one? It used to be that way but was changed.

Effective April 30th, 2008, DFAS-Cleveland (CL) will automatically transfer the balance of any dormant SDP account, 120 days after the termination of the qualifying duty, to the member's financial institution.

Other good myPay info:

Effective May 19, 2006, members can view and print SDP information, account history information, and SDP 1099-INT information via MyPay. The first line of the SDP information on the MyPay account screen displays information that is current as of “MMM DD YYYY" and includes deposits and withdrawals that were posted prior to this date from the previous month only. Transactions that occur after this date, but during the current month, will be reflected in the next MyPay update.

[Jughead]

Are you kidding me? You are asking this question after giving me a few spankings on my answers on the same subject and your keen advice to others. Starts about here: https://www.flyingsquadron.com/forums/index...st&p=198540

Negative. Not the same subject (though closely related, true). I'm specifically asking under what circumstances the warning on my LES about exceeding the election "exceeding the net amount due" kicks in. Anything substantially less than 100% on all categories will obviously render this moot--and, the last time I was in a CZTE, the limit on base pay was 10%. This is new to me.

Net pay is what you bring home. So if you bring home $2,000 a paycheck as net every payday, then $4k is all you can put towards TSP (assuming twice a month paydays). If your TSP amount exceeds the $4k, then the system will not deduct anything for TSP. Kind of like a check bouncing.

I get that. The possibility I'm concerned with is if FITW, FICA, SGLI, other allotments (say, USSDP contributions) must be paid from taxable income--goes back to what I said about not being sure what "net amount due" means. I "think" that, so long as those other decutions add up to less than the amount that can't go into the TSP in any case (BAH & BAS), I'm safe--i.e., what you just said about "net pay," a familiar term. Your answer & Toro's both seem to support that--thank you.

FTR, you appear to have taken personal offense to our disagreement ref the TSP & CZTE in the other thread (I hadn't read this one at the time). Please don't. While I did (and do) disagree with your point [pretty thoroughly beat to death over there], I did not intend to offend or insult--and, if I did so, I apologize.

[latidah]

waldo:

I've used the SDP while deployed since even though you only earn simple interest on anything $10K or over, it still beats any other short-term investment vehicle out there. You still have to wait 30 days until you can deposit any amount, but at least one finance office will allow you to deposit the whole $10K in one lump amount, even if would exceed the amount of unallotted pay (or whatever it is they go by) you've earned since deployment - you just need your commander to verify that you *could* earn that amount. Mostly comes into play for us reserve/guard folk who come on/off orders at various dates during the month and don't have a normal bi-monthly paycheck, but it could apply to anyone I suppose.

Just a caveat - keep your damn receipt. They conveniently "lost" my last deposit until I emailed them wondering why I didn't have a new SDP statement. Quick fax and they "found" my $$. Even were quick about posting the correct interest too, but I trust DFAS enough to *@%! up my pay almost every other month, and they did not disappoint me in that trust with their handling of SDP either.

edited to add: Finance_Guy - Jughead actually is correct on the money sitting in your account until you request it. I didn't request a withdrawl from the SDP after my last rotation and let the money sit, expecting a transfer to my mil pay account. Even got an email 2 months ago saying that my account was dormant and if I didn't do the request in myPay within 7 days, the money would be transferred. Well, I figured they were really going to transfer it then, but 2 months later, all the money in my SDP is still there.

Edited March 12, 2009 by latidah

[Finance_Guy]

Negative. Not the same subject (though closely related, true). I'm specifically asking under what circumstances the warning on my LES about exceeding the election "exceeding the net amount due" kicks in. Anything substantially less than 100% on all categories will obviously render this moot--and, the last time I was in a CZTE, the limit on base pay was 10%. This is new to me.

FTR, you appear to have taken personal offense to our disagreement ref the TSP & CZTE in the other thread (I hadn't read this one at the time). Please don't. While I did (and do) disagree with your point [pretty thoroughly beat to death over there], I did not intend to offend or insult--and, if I did so, I apologize.

I'm not offended or insulted and am not taking anything personnaly on this board. I know I'm right given the fact I've worked in finance for close to 26 years? I've researched deeply into pay records and see exactly how it all works and have asked the questions to DFAS since it didn't appear right to me. I honestly think they have a glitch in the pay system. And the 10% was changed years ago, you can now put in up to 100% of base pay, but that could be hard to do per the LES remark you mentioned since many would exceed net income if electing 100% of base pay--it just depends.

On that note. I was just jabbing you on the net pay question since you clearly had the TSP and taxes down pat on our earlier exchanges--I figured you'd know that one too. Net pay is what's left after all taxes/deductions and allotments are taken out. I guess I can see how some can get that confused.

Appreciate your help on the posts. Appears you have some decent knowledge of how all this pay stuff works.

Later.

....but I trust DFAS enough to *@%! up my pay almost every other month, and they did not disappoint me in that trust with their handling of SDP either.

edited to add: Finance_Guy - Jughead actually is correct on the money sitting in your account until you request it. I didn't request a withdrawl from the SDP after my last rotation and let the money sit, expecting a transfer to my mil pay account. Even got an email 2 months ago saying that my account was dormant and if I didn't do the request in myPay within 7 days, the money would be transferred. Well, I figured they were really going to transfer it then, but 2 months later, all the money in my SDP is still there.

Thanks. I think the your first para above answers your edited to add. DFAS is supposed to withdraw the money at 120 days. I guess they discovered that was too much work and an email to the customer is much easier. Thanks for the update. Did you finally go into myPay and request the withdrawal? Just curious how long it takes DFAS.

Edited March 12, 2009 by Finance_Guy

[Toro]

Is the SDP something you've used in the past Toro?

I'd like to buy a house in the next year or so and I will need access to this money and it seems as though I can earn a much better interest rate while retaining access than say a conventional CD/MMA. Not to mention the USAA account it's sitting in currently isn't earning nearly as much.

Yes, I have used it twice. I took back the interest on my most recent deposit in December. I would seriously doubt you'll earn a better interest rate on something else with the current state of the economy.

[latidah]

Thanks. I think the your first para above answers your edited to add. DFAS is supposed to withdraw the money at 120 days. I guess they discovered that was too much work and an email to the customer is much easier. Thanks for the update. Did you finally go into myPay and request the withdrawal? Just curious how long it takes DFAS.

F_G: Nope, I've just let it sit (feel lucky that I don't "need" the money just now). Got another email today about my dormant account - I'm going to let this one ride too and see if they actually transfer it. If nothing happens by next month, I'll just go into myPay and fill out the withdrawl request. I'll let you guys know how long it takes to transfer if that happens.

[Finance_Guy]

F_G: Nope, I've just let it sit (feel lucky that I don't "need" the money just now). Got another email today about my dormant account - I'm going to let this one ride too and see if they actually transfer it. If nothing happens by next month, I'll just go into myPay and fill out the withdrawl request. I'll let you guys know how long it takes to transfer if that happens.

Don't need it! You could have bought some Citigroup, Inc. stock for cheap Monday and almost got a 60% return by yesterday. Monday it was down around a $1 a share. Still may be a good buy.

Just kidding though. What you do with your $$ is your business. You do know it is no longer drawing interest.

Edited March 13, 2009 by Finance_Guy

[abmwaldo]

Link to DFAS website with information on SDP

[Jughead]

I'm headed off to the desert in a few months. It's my intention to max out the TSP (or come as close as possible). It's been so long since I deployed that there were still limits on percent of base pay that could be contributed. Nowadays, making all categories 100% would seem to be the way to achieve the max....

HOWEVER, I see the following statement on all my LES's: "IF TSP ELECTION AMT EXCEEDS NET AMT DUE, TSP WILL NOT BE DEDUCTED." I'm not really sure what that means. I *think* what it's telling me is that if the TSP contribution (calculated based on the percentages I set) would result in a negative number after all my other deductions, then the whole contribution is cancelled. Yes/no?

Following up on my own question. I've been delayed getting to the desert--the MC-12 program & associated delays are discussed I just finished MQT and will be trying out my TSP & CZTE theories shortly.

One snag I've hit is that I seem unable to set my Base Pay TSP deduction to 100%--I change it, and it comes back (the next month) at 92%. I did some poking around and found this on MyPay:

• The Thrift Savings Program provides an opportunity to invest in your future. You have the opportunity to elect 100% of “resulting pay” which is gross basic pay less mandatory deductions and TSP loan payments.
  
• Choose your TSP election percentage wisely and remember to consider your other monthly obligations. You should carefully calculate the percentage of basic pay allocated to TSP per month keeping in mind the total TSP contribution amount for 2009 is $16,500 deferred and up to $49,000 total of exempt and deferred if you have been deployed to a combat zone. Also consider all current deductions such as; Social Security and Medicare tax (i.e., 7.65% of basic pay); garnishments; alimony; child support; and all allotments. Determine your ability to maximize your TSP contribution while maintaining enough funds to support your lifestyle. In cases where your percentage election exceeds resulting pay (i.e., pay after deductions) DFAS will work with you and your supporting finance office to provide the TSP percentage that is closest to the percentage you elected.
  

I'm assuming that the 7.65% FICA deductions are where the 8% is going. That implies that the "mandatory deductions" must come out of Base Pay only (and not, say, BAH and/or BAS, which in my case could cover it). In other words, even though the TSP advises that each category can be contributed at any whole-number percentage, 1 - 100%, apparently the max is really 92% for Base Pay. The only "allotment" I have is SGLI, but I don't think that comes into play here.

FG or anyone else, does that jibe?

This also seems to make any question of exceeding the net amount due (per the note on my LES's) a non-issue. I guess maybe there are other types of deductions that could be made that would put you updside down...?

[addict]

Following up on my own question. I've been delayed getting to the desert--the MC-12 program & associated delays are discussed I just finished MQT and will be trying out my TSP & CZTE theories shortly.

One snag I've hit is that I seem unable to set my Base Pay TSP deduction to 100%--I change it, and it comes back (the next month) at 92%. I did some poking around and found this on MyPay:

I'm assuming that the 7.65% FICA deductions are where the 8% is going. That implies that the "mandatory deductions" must come out of Base Pay only (and not, say, BAH and/or BAS, which in my case could cover it). In other words, even though the TSP advises that each category can be contributed at any whole-number percentage, 1 - 100%, apparently the max is really 92% for Base Pay. The only "allotment" I have is SGLI, but I don't think that comes into play here.

FG or anyone else, does that jibe?

This also seems to make any question of exceeding the net amount due (per the note on my LES's) a non-issue. I guess maybe there are other types of deductions that could be made that would put you updside down...?

Yes it jives.

Just don't contribute to the TSP when you have CZTE without a very good second look at where the money is going.

[Jughead]

Just don't contribute to the TSP when you have CZTE without a very good second look at where the money is going.

Hmm? Elaborate, please?

[addict]

Hmm? Elaborate, please?

A tax-free dollar in the TSP results in income tax on the capital gains. Repeated trading doesn't get taxed, but these are long term funds anyway.

[Finance_Guy]

A tax-free dollar in the TSP results in income tax on the capital gains. Repeated trading doesn't get taxed, but these are long term funds anyway.

Not tracking on this one?? All dollars put into TSP are essentially Tax Free. All capital gains and "Deferred" contributions in TSP will be taxed at some point when withdrawn. BUT, the "Exempt" CZTE contributions you take out down the road will never be taxed when withdrawn.

Just to humor this issue again from Jughead's and my lengthy exchange on the topic, is there anyone out there who may have put 100% of fly pay into TSP when in a combat zone where it otherwise was taxable in their regular pay. This would mainly only apply to those officers who max out the CZTE exemption with their base pay alone so therefore flypay would normally be taxed. But, put same flypay in TSP it's now not taxed AND goes in as "Exempt" contributions. Thereby getting more tax free when withdrawn from TSP.

Edited November 18, 2009 by Finance_Guy

[addict]

Not tracking on this one?? All dollars put into TSP are essentially Tax Free. All capital gains and "Deferred" contributions in TSP will be taxed at some point when withdrawn. BUT, the "Exempt" CZTE contributions you take out down the road will never be taxed when withdrawn.

Just to humor this issue again from Jughead's and my lengthy exchange on the topic, is there anyone out there who may have put 100% of fly pay into TSP when in a combat zone where it otherwise was taxable in their regular pay. This would mainly only apply to those officers who max out the CZTE exemption with their base pay alone so therefore flypay would normally be taxed. But, put same flypay in TSP it's now not taxed AND goes in as "Exempt" contributions. Thereby getting more tax free when withdrawn from TSP.

TSP.gov: "You receive no direct tax benefit from contributing pay to the TSP which has been excluded from gross income; however, the earnings on those contributions are tax-deferred."

Look, I can either buy stock and pay short term or long term gains whenever I want the money, or buy a TSP share for the same amount and pay income tax on withdrawal at a fixed date.

Edited November 18, 2009 by addict

[PolyestherDuck]

Not tracking on this one?? All dollars put into TSP are essentially Tax Free. All capital gains and "Deferred" contributions in TSP will be taxed at some point when withdrawn. BUT, the "Exempt" CZTE contributions you take out down the road will never be taxed when withdrawn.

Just to humor this issue again from Jughead's and my lengthy exchange on the topic, is there anyone out there who may have put 100% of fly pay into TSP when in a combat zone where it otherwise was taxable in their regular pay. This would mainly only apply to those officers who max out the CZTE exemption with their base pay alone so therefore flypay would normally be taxed. But, put same flypay in TSP it's now not taxed AND goes in as "Exempt" contributions. Thereby getting more tax free when withdrawn from TSP.

You're right. I put a big chunk of my pilot bonus into TSP two years ago. Everything I put in went in as tax exempt. As a result, the cut the .gov took in taxes for the month of my bonus check was much smaller.

[Jughead]

Just to humor this issue again from Jughead's and my lengthy exchange on the topic, is there anyone out there who may have put 100% of fly pay into TSP when in a combat zone where it otherwise was taxable in their regular pay. This would mainly only apply to those officers who max out the CZTE exemption with their base pay alone so therefore flypay would normally be taxed. But, put same flypay in TSP it's now not taxed AND goes in as "Exempt" contributions. Thereby getting more tax free when withdrawn from TSP.

I intend to do exactly that. I should be in-country w/in a week--I doubt my Nov LES will catch up, so I probably won't have a good source to look at until I get my Dec LES. Based on the foregoing, I suspect it won't be until W-2 time (late Feb?) that I can convince you of the error of your ways.... In all seriousness, I really do hope to be proven wrong (and soak up the double tax-exemption!)....

Do you have an opinion on the maximum Base Pay to TSP question, FG? If the 7.65% FICA withholding *must* come out before any TSP consideration, than I'd say that 92% is the "real" max Base Pay contribution, not 100%....

[Jughead]

TSP.gov: "You receive no direct tax benefit from contributing pay to the TSP which has been excluded from gross income; however, the earnings on those contributions are tax-deferred."

Look, I can either buy stock and pay short term or long term gains whenever I want the money, or buy a TSP share for the same amount and pay income tax on withdrawal at a fixed date.

Still not tracking, addict. Yes, there's "no direct tax benefit" from putting tax-exempt income in--you can't make a deferred contribution with money that's already tax-exempt. However, you still get the benefit of tax-defferred growth.

If I put a tax-exempt $1 in the TSP, it grows/compounds over time. When I withdraw that $1, I pay no tax on it. When I withdraw the interest and/or gains attributable to the $1, I pay tax on it.

If I put a tax-exempt $1 in a CD/savings account/mutual fund/whatever, it grows/compounds over time. In any (non-tax advantaged) of these, I pay tax on any gains in the year they are paid--thus reducing the amount of compounding available. In the case of a single stock or equity, yes, you only pay the tax when you sell ("withdraw")--but unless you only sell at the time you intend to spend the money, you've still lost the ability to compound growth on the money lost to taxes. Also, if one makes the assumption that he will be in a lower tax bracket in retirement, deferring taxes until then means even more effective growth.

BL, there are still advantages to putting already-exempt money into the TSP, even though it doesn't affect your tax bottom line in the current year.

[Finance_Guy]

I intend to do exactly that. I should be in-country w/in a week--I doubt my Nov LES will catch up, so I probably won't have a good source to look at until I get my Dec LES. Based on the foregoing, I suspect it won't be until W-2 time (late Feb?) that I can convince you of the error of your ways.... In all seriousness, I really do hope to be proven wrong (and soak up the double tax-exemption!)....

Do you have an opinion on the maximum Base Pay to TSP question, FG? If the 7.65% FICA withholding *must* come out before any TSP consideration, than I'd say that 92% is the "real" max Base Pay contribution, not 100%....

Sorry for the delay, I had tried to post but the Forum went down.

On #1, you will only see this if your base pay exceeds the total exemption amount allowed. So if you fall in that category and Your base pay exceeds the total allowed, then you would agree that fly pay would be taxable on your LES. But put that same fly pay into TSP in the same scenario and you will see those dollars go in as exempt (assuming you are not also putting in 100% of base pay). So taking any base pay paid on the LES as exempt income plus the amount of Fly pay to TSP tagged as exempt actually garners more exempt income. Agreed you would not pay tax anyway on fly pay when putting into TSP in a regular scenario but that would be tagged as deferred and eventually you would pay tax when withdrawn, but in my case point when that fly pay is withdrawn it would not then be taxed since it was exempt and would otherwise have been taxed if not put in TSP and paid out on the LES.

#2, Basically you have to factor in the mandatory deductions (Fed, FICA, Medicare, SGLI, Allotments etc). Easiest method is to take your net pay for the month, say it's $5000 ($2500 each payday) and divide that by your base pay (ex of $6,000), that's pretty close to the max percent of base pay you can put in (83%). You can get more technical and work in the fact you wouldn't have fed tax on the base pay so that would free up more % of base pay to put in. So if you factored Federal at $500 then we'd take $5500 divided by $6k and the percent ups to 91.6%.

If your base pay does not exceed the CZTE exempt max, and you put in close to all your base pay right away, then you may not see the extra fly pay go into TSP as exempt since the LES pay and exempt amounts would pretty much be mirrored into TSP. And consider if you max out your entire base pay for the percent, that would leave no extra dollars for the fly pay to be withheld either. But put in 50% of Base pay to TSP and I'll bet you would see it. If you want, PM me your actual amounts and I can try to work it up. I've seen it on a few pay records and it's true. It will be nice for you to see it for yourself and hopefully confirm what I've been saying. I'm not saying it's correct by the IRS rules and all that, but that's what the pay system does.

[Jughead]

Sorry for the delay

No worries--sorry for my own delay, just getting my feet under me in the AOR. Thanks for hitting the questions.

If your base pay does not exceed the CZTE exempt max, and you put in close to all your base pay right away, then you may not see the extra fly pay go into TSP as exempt since the LES pay and exempt amounts would pretty much be mirrored into TSP. And consider if you max out your entire base pay for the percent, that would leave no extra dollars for the fly pay to be withheld either. But put in 50% of Base pay to TSP and I'll bet you would see it.

I'm not sure I follow--does the issue of doubling the tax advantage only occur with a partial Base Pay contribution? My Base Pay exceeds the CZTE limit (O-5 18+ yrs), but the 92% limit does not. Taking the flight pay (100%) will cover the difference with a bit left over. As I understand your point, I should make a lesser Base Pay contribution in order for the full flight pay to happen? I don't see what difference that would make. Since I want to maximize the amount into the TSP, I don't want to do that for Dec--but I can experiment in January, if you like.

BL, we seem to agree on all the mechanics, just not the result.....

If you want, PM me your actual amounts and I can try to work it up. I've seen it on a few pay records and it's true. It will be nice for you to see it for yourself and hopefully confirm what I've been saying. I'm not saying it's correct by the IRS rules and all that, but that's what the pay system does.

Wilco, thanks!