The TSP is the single most powerful wealth-building tool in the federal compensation package — and the least used to its full potential. Most federal employees contribute something but have never modeled what their balance looks like at retirement across realistic growth scenarios. This tool does that, with the FERS agency match calculated precisely and 2026 contribution limits applied automatically.
FERS employees receive: (1) 1% automatic agency contribution every pay period regardless of what you contribute; (2) dollar-for-dollar match on your first 3% of basic pay contributed; (3) $0.50 match for each $1 on the next 2%. Contribute 5% and you receive 5% from the agency — 10% total going into your TSP every pay period. Stop at 4% and you're leaving 0.5% on the table every two weeks for your entire career.
Section I TSP Growth Projector
Project My TSP Balance at Retirement
Section II 2026 Contribution Limits
The IRS increased the TSP elective deferral limit to $24,500 for 2026 — up $1,000 from $23,500 in 2025. The catch-up limit for employees 50 and older also increased. A new higher catch-up for ages 60–63 under SECURE Act 2.0 remains at $11,250.
| Contribution Type | 2025 Limit | 2026 Limit | Per Pay Period (26) |
|---|---|---|---|
| Standard elective deferral | $23,500 | $24,500 | $942.31 |
| Catch-up (age 50–59, 64+) | $7,500 | $8,000 | $307.69 additional |
| Catch-up (ages 60–63, SECURE 2.0) | $11,250 | $11,250 | $432.69 additional |
| Total maximum (50–59, 64+) | $31,000 | $32,500 | $1,250.00 |
| Total maximum (60–63) | $34,750 | $35,750 | $1,375.00 |
Starting January 28, 2026, TSP participants can convert traditional (pre-tax) balances to Roth (after-tax) status directly within their TSP account — without rolling out to an IRA first. Minimum conversion is $500; up to 26 conversions allowed per year. The converted amount is taxable income in the year of conversion. This is a significant planning tool for employees approaching retirement who want to reduce future required minimum distributions.
Section III Maximizing the FERS Match
The FERS agency match is the closest thing to guaranteed, risk-free investment return in the federal compensation package. Not contributing at least 5% is leaving money behind every pay period.
| Employee Contributes | Agency Auto (1%) | Agency Match | Total Agency | Total Going In |
|---|---|---|---|---|
| 0% | 1% | 0% | 1% | 1% |
| 1% | 1% | 1% | 2% | 3% |
| 2% | 1% | 2% | 3% | 5% |
| 3% | 1% | 3% | 4% | 7% |
| 4% | 1% | 3.5% | 4.5% | 8.5% |
| 5% ← Full match | 1% | 4% | 5% | 10% |
| 10% | 1% | 4% | 5% | 15% |
Section IV Roth vs. Traditional TSP
Both produce the same pretax contribution deduction amount — the difference is when you pay tax. The right choice depends on your current marginal rate versus your expected retirement rate.
When to use Traditional vs. Roth TSP
- Traditional (pre-tax) wins when: Your current tax bracket is higher than your expected retirement bracket. Common for GS-13 through GS-15 employees at peak earnings who expect to drop to a lower bracket in retirement. Reduces taxable income today — the most valuable at high marginal rates.
- Roth (after-tax) wins when: You are early in your career at a lower tax bracket, you expect tax rates to rise, or you want to avoid required minimum distributions. Roth TSP has no RMDs during the owner's lifetime starting in 2024 under SECURE 2.0. Ideal for GS-7 through GS-11 employees with 20+ years ahead.
- Split contributions: A practical hedge — contribute enough to Traditional to reduce your current taxable income to the next bracket down, then route additional contributions to Roth. Diversifies your tax exposure in retirement without trying to predict future rates.
- The 2026 Roth catch-up rule: If your prior-year Medicare wages exceeded $150,000, catch-up contributions in 2026 must go to Roth regardless of your election. This applies to most GS-14 and GS-15 employees who've been working for several years.
Section V Frequently Asked Questions
If you reach the $24,500 elective deferral limit before December 31, your contributions stop for the rest of the year — and so does the agency match. You only receive matching on pay periods where you are actively contributing. To avoid losing match, spread contributions evenly across all 26 pay periods: contribute $942.31 per period to hit the limit exactly in the last period. This is called the "per-period strategy" and is the most common approach for employees maxing out contributions.
The TSP offers five individual funds: G Fund (government securities, lowest risk, currently ~4.3% annual return), F Fund (fixed income), C Fund (S&P 500 equivalent, highest long-term return historically ~10.5% annual over 30 years), S Fund (small/mid cap), and I Fund (international stocks). The L Funds are lifecycle funds that automatically shift allocation as retirement approaches. For long-horizon investors, the C Fund has historically produced the highest returns among the options. The conservative 5% scenario in this tool approximates a heavy G/F allocation; the 9% optimistic scenario approximates a mostly C Fund allocation.
Yes, if your income is within the Roth IRA phase-out range. For 2026, Roth IRA contributions phase out for single filers between $153,000 and $168,000, and for married filing jointly between $242,000 and $252,000. The TSP and a Roth IRA have separate contribution limits — maxing your TSP does not affect your ability to contribute $7,500 to a Roth IRA (2026 limit). Many federal employees in the $80,000–$150,000 salary range should consider doing both.
No. The FERS pension is calculated entirely from your years of service and high-3 average salary — TSP balance has no bearing on the pension calculation. They are two completely separate retirement benefits. TSP is a defined contribution plan (what you put in plus growth); FERS is a defined benefit plan (a formula-based annuity). You receive both simultaneously in retirement, which is what makes the FERS+TSP+Social Security "three-legged stool" so powerful compared to private-sector 401(k)-only retirement.