The Thrift Savings Plan (TSP) is the third leg of the FERS retirement stool — and for many federal employees, it ends up being the largest source of retirement income. Yet a surprising number of federal employees leave free government money on the table every year by not contributing enough.
2026 TSP Contribution Limits
The IRS announced the following limits in November 2025, effective January 1, 2026:
| Contribution Type | 2026 Limit |
|---|---|
| Employee elective deferrals | $24,500 |
| Standard catch-up (age 50–59 and 64+) | $8,000 |
| Super catch-up (age 60–63) | $11,250 |
| Total if age 50–59 or 64+ | $32,500 |
| Total if age 60–63 (Super Catch-Up) | $35,750 |
| Annual additions limit (all sources) | $72,000 |
These limits apply to your contributions. The government’s automatic and matching contributions do not count against your elective deferral limit.
Compared to 2025: The elective deferral limit increased from $23,500 → $24,500 (+$1,000), and the standard catch-up increased from $7,500 → $8,000 (+$500).
The Super Catch-Up Contribution (Ages 60–63)
Introduced under the SECURE 2.0 Act, the “Super Catch-Up” is a higher catch-up limit exclusively for participants turning age 60, 61, 62, or 63 during the calendar year. In 2026, that limit is $11,250 instead of the standard $8,000.
This means a 62-year-old federal employee can contribute up to $35,750 in 2026 — a powerful tool in the final sprint toward retirement.
The 5% Match — The Most Important Number
As a FERS employee, you receive two types of government TSP contributions:
1. Automatic 1% contribution: OPM contributes 1% of your basic pay to your TSP every pay period — regardless of whether you contribute anything. You vest in this after 3 years (or 2 years for congressional employees).
2. Matching contributions: Up to 4% more is matched dollar-for-dollar based on your own contributions.
Here’s how the match table works:
| Your Contribution | Government Match | Total into TSP |
|---|---|---|
| 0% | 1% (automatic) | 1% |
| 1% | 1% auto + 1% match = 2% | 3% |
| 3% | 1% auto + 3% match = 4% | 7% |
| 5% | 1% auto + 4% match = 5% | 10% |
| 6%+ | Still 5% government total | 11%+ |
The key takeaway: Contributing 5% gives you the full 5% government match for a total of 10% of your salary going into your TSP every pay period. Contributing less than 5% means you are leaving money behind.
New in 2026: SECURE 2.0 Roth Catch-Up Rule
Under the SECURE 2.0 Act, if your wages from your federal employer in the prior year (2025) exceeded $150,000, any catch-up contributions you make in 2026 must be designated as Roth (after-tax). You cannot make traditional (pre-tax) catch-up contributions if you exceed this income threshold.
This applies to the standard $8,000 and the Super Catch-Up $11,250 limits alike.
Spread Contributions Across the Year
The TSP uses an automatic “spillover” method — once your contributions reach the $24,500 elective deferral limit, any further contributions automatically count as catch-up (if you’re eligible). No separate election is needed.
However, front-loading your contributions (maxing out early in the year) can cause you to lose agency matching in the final pay periods when your deductions stop. To capture the full government match, spread your contributions evenly across all 26 pay periods.
Traditional vs. Roth TSP
You can split contributions between Traditional (pre-tax) and Roth (after-tax) TSP:
- Traditional TSP: Contributions reduce taxable income today. Withdrawals in retirement are taxed as ordinary income.
- Roth TSP: Contributions made with after-tax dollars. Qualified withdrawals in retirement are completely tax-free.
A common strategy: contribute Traditional while in your peak earning years (when your tax rate is highest), and shift some contributions to Roth in earlier or lower-earning years.
TSP Investment Funds
The TSP offers five core funds:
- G Fund: Government securities — zero credit risk but low returns
- F Fund: Fixed-income index
- C Fund: Large-cap U.S. stocks (mirrors S&P 500) — historically the highest-returning core fund
- S Fund: Small-cap U.S. stocks
- I Fund: International stocks
Lifecycle (L) Funds automatically adjust the allocation based on your target retirement year — a reasonable default choice if you do not want to manage allocations manually.
The Math of Missing the Match
Say you earn $90,000 and contribute 0% to TSP. You miss:
- 1% automatic: $900/year free
- Up to 4% matching: up to $3,600/year free
- Total missed annually: $4,500
- Over 20 years at 7% growth: ~$184,000 in missed wealth
Contributing at least 5% is arguably the single highest-return action any FERS employee can take.
Combine your TSP with your FERS pension estimate using our FERS Calculator — it includes an optional TSP projection.