Federal employees have unique retirement needs, so it’s important to follow guidelines tailored to your situation. While private-sector workers are often advised to save about six times their pre-retirement income by age 50, federal employees’ recommended TSP balance is closer to four times their annual salary. This lower target accounts for the added security provided by the FERS pension. If you haven’t reached this milestone yet, there’s still time to catch up—especially once you become eligible for catch-up contributions at age 50.
Maximize Your Agency Match
If you’re not contributing enough to get your full agency match, you’re leaving free money on the table. Federal agencies match up to the first 5% of your TSP contributions: the first 3% is matched dollar-for-dollar, and the next 2% is matched at 50 cents on the dollar. Over time, these matching contributions, combined with compounding, can significantly grow your retirement savings. Once you reach the annual TSP contribution limit, any additional contributions automatically count as catch-up contributions.
Catch-Up Contributions at Age 50+
Starting at age 50 (or during the calendar year you turn 50), you can contribute extra to your TSP in addition to your regular contributions. The 2025 catch-up contribution limit is $7,500, on top of the standard $23,500 limit. Any contributions beyond the regular limit are counted as catch-up contributions, and you’ll continue to receive matching contributions on up to 5% of your salary.
Enhanced Catch-Up Contributions at Ages 60–63
Under the Secure Act 2.0, participants turning 60, 61, 62, or 63 can contribute even more. As of January 1, 2025, eligible employees can make an additional $11,250 contribution. These amounts will adjust for inflation over time, offering a meaningful opportunity to boost your TSP balance before retirement.
Planning for a federal retirement comes with unique considerations, especially since most retirement guidance is aimed at private-sector workers without a FERS pension. Working with a Federal Retirement Consultant (FRC®) can help you align your TSP, insurance, and other benefits to ensure your retirement plan meets your long-term goals.
