Question: Chris, I'm over 50 and as a federal employee I have the ability to contribute $5000 more each year (to "catch up" on my retirement savings) than the maximum annual contribution to my Thrift Savings Plan. I currently contribute the maximum amount each year.

My wife and I have few debts beyond our mortgage. We have sons who start college in 4 years and in 7 years--but we fully funded a 529 plan several years ago.

My question: should we contribute the $5000 in catch up funds to the TSP; should I take that money and invest it in the market or in bonds; or should we add the funds to our 529 plans? Many thanks. John, Alexandria, VA

Answer: My first thought is good, no matter what you want to save the $5,000.

Now, you say your 529 college savings plan is fully funded. I imagine you could top it off, but you're probably okay on that front.

So, my bias is to suggest adding to your retirement savings.

However, I would look at your taxable savings accounts and see how you're doing. Do you have enough money set aside to deal with routine unexpected expenses, such as engine trouble or a busted boiler, let alone a job loss or medical emergency?

If the answer is yes, then put all $5,000 into retirement savings. If you're not sure, it would make sense to put, say, an additional $3,000 into retirement and the remaining $2,000 in taxable savings accounts. (You can play with the numbers; that's just an illustration.) . And if you don't end up tapping the savings it's still available for spending on college or your retirement.

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