Starting 2026, Mandatory Catch-Up Contributions to the Roth TSP
Beginning January 1, 2026, federal employees whose 2025 taxable income exceeded $150,000 must contribute catch-up amounts to Roth TSP accounts rather than traditional accounts.
Key Points
- Government matching contributions (5%) still go to traditional TSP regardless
- Traditional TSP contributions reduce taxable income but withdrawals are taxed
- Roth contributions are after-tax but qualified withdrawals are tax-free
- Traditional accounts require RMDs at specified ages; Roth accounts don't
- High earners can strategically contribute $8,600 to traditional IRAs instead
- In-plan Roth conversions will become available in TSP starting January 2026
Strategic Recommendations
Consult financial advisors to evaluate individual circumstances, as the decision between mandatory Roth contributions and alternative strategies depends on anticipated future income and tax rates.
