Thrift Savings Plan (TSP): 2026 Limits and Tips

What it is

The Thrift Savings Plan is a retirement savings account for federal workers and the military. You choose how much of your pay to put in, and it comes out of your paycheck automatically. The money is invested in low-cost funds. You can choose traditional (tax break now, pay tax later) or Roth (pay tax now, tax-free later), or both.

2026 limits

• Employee contributions: $24,500 a year, traditional and Roth combined.
• Catch-up contributions: If you are 50 or older, you can add $8,000 more. If you are 60 to 63, the catch-up limit is $11,250 instead.
• Total annual additions: $72,000. This counts your money plus any government money. It mostly matters for people saving tax-free combat pay.
• New Roth catch-up rule: Starting in 2026, if you are 50 or older and your wages last year were over $150,000, your catch-up money must go in as Roth.

Who gets it

Any active duty, Guard or Reserve member can contribute. If you are in the Blended Retirement System, the government adds an automatic 1% and matches up to 4% more. See our BRS guide.

How to use it

• Sign up or change your amount in myPay (or your service's pay system). You can choose a percent of basic pay, and also of special pays, incentive pays and bonuses.
• Pick your funds at tsp.gov. New accounts usually start in an age-based Lifecycle (L) Fund. You can change that any time.
• Consider Roth while you are young. Many junior troops are in a low tax bracket, and so much of their pay is tax-free allowances. Paying tax now with Roth can make sense.

The combat zone advantage

When you earn tax-free pay in a combat zone and put it in the Roth TSP, you never pay tax on that money, going in or coming out (as long as you follow the withdrawal rules). Tax-free money put in the traditional TSP also stays tax-free, though the earnings are taxed when you take them out. Combat-zone contributions above the $24,500 limit can go in up to the $72,000 total limit. Note: members earning tax-exempt combat pay must make any catch-up contributions as Roth.

What people miss

• Bonuses do not go in unless you say so. Your basic pay percentage does not cover bonuses or special pays. Elect them separately.
• Do not max out too early. If you are in BRS and hit $24,500 before December, you lose the match for the rest of the year.
• Do not cash out when you leave. You can leave your money in the TSP after you separate, or roll it into an IRA. Cashing out early means taxes and often a 10% penalty.
• Loans have strings. You can borrow from the TSP, but if you separate with a loan unpaid, it can become taxable.
• Name a beneficiary. The TSP has its own beneficiary form. SGLI forms do not cover it.

Related

See the Blended Retirement System guide for matching rules, and Special Pays and Tax Advantages for combat zone tax rules.