The Thrift Savings Plan (TSP), explained
The Thrift Savings Plan (TSP) is the retirement savings and investment plan for federal employees and members of the uniformed services. For employees under the Federal Employees Retirement System (FERS), it is one of three parts of retirement income, alongside the FERS pension and Social Security. Here is how it works in 2026, from TSP.gov.
Money your agency adds
If you are covered by FERS, your agency adds two kinds of contributions:
- Automatic (1%) contributions: your agency puts in an amount equal to 1% of your basic pay every pay period, even if you contribute nothing. These are subject to vesting, meaning you must work a certain amount of time before they are yours to keep.
- Matching contributions: your agency matches the first 5% of pay you contribute. The first 3% is matched dollar for dollar and the next 2% at 50 cents on the dollar.
Contribute 5% of your basic pay and your agency adds 4% in matching plus the automatic 1%, for 10% in total. Contributing less than 5% leaves part of the match unclaimed.
Traditional or Roth
You choose how your own contributions are taxed:
- Traditional: contributions come out of pay before taxes and grow tax-deferred; you pay tax when you withdraw.
- Roth: contributions are made after tax, and qualified withdrawals in retirement can be tax-free.
2026 contribution limits
| Limit | 2026 amount |
|---|---|
| Elective deferral limit (traditional and Roth combined) | $24,500 |
| Catch-up, age 50 and over | $8,000 |
| Catch-up, born 1963 to 1966 (ages 60 to 63 in 2026) | $11,250 |
Agency contributions do not count toward the $24,500 limit.
New in 2026: some catch-up contributions must be Roth
Starting January 1, 2026, if you earned more than $150,000 in 2025, any catch-up contributions you make in 2026 must be Roth, whatever your usual election. The threshold is adjusted for inflation each year. For most people the switch happens automatically; others may need to check with their payroll office.
The five individual funds
- G Fund: specially issued U.S. Treasury securities with a guaranteed rate of interest, reset monthly.
- F Fund: government and corporate bonds.
- C Fund: 500 of the largest U.S. companies.
- S Fund: over 3,000 small and medium-sized U.S. companies.
- I Fund: over 5,000 companies in 44 countries outside the U.S.
TSP.gov also offers Lifecycle (L) Funds, which mix these funds according to when you expect to need the money. Choosing among them is an investment decision; TSP.gov's fund comparison tools and a qualified financial professional can help.
Where insurance fits in retirement planning
Your TSP is savings. Insurance does a different job: it protects your income and your family if something happens before those savings have built up, or covers costs savings would otherwise have to absorb. A full retirement plan usually looks at both.
Sources
- OPM, FERS information, checked October 7, 2026
- TSP.gov, Contributions, checked October 7, 2026
- TSP.gov, Contribution limits, checked October 7, 2026
- TSP.gov, Individual funds, checked October 7, 2026