TSP 2026: The New Limits That Could Make or Break Your Retirement

When the IRS quietly bumps up contribution limits, most people just see a new dollar amount… and never stop to ask the real question:

For 2026, that’s exactly what we’re going to answer — especially if you’re a GS or a retiree who’s back at work and still contributing.

What’s actually changing in 2026

For 401(k), 403(b), 457, and the Thrift Savings Plan, the IRS has raised the core numbers for 2026:

• Under 50 Employee contribution limit: $24,500 (Previously $23,500)

• Standard age-50+ catch-up: $8,000 (Previously $7,500)

• Special age 60–63 “super catch-up”: $11,250 (Unchanged)

• Total employee + agency limit: $72,000 (Previously $70,000)

Put differently, your personal ceiling is now:

• Under 50: up to $24,500 into TSP

• Age 50 or older: up to $32,500 (that’s $24,500 + $8,000)

• Age 60–63: up to $35,750 ($24,500 + $11,250)

The numbers look dry on paper, but they create very real opportunities in your late 40s, 50s, and early 60s.

A quick reality check for a GS-12

Let’s ground this in something concrete.

For 2025, the base pay range for GS-12 runs from about $75,700 (Step 1) to $98,400 (Step 10) before locality.

If you’re somewhere in the middle — say around $90,000 once you factor in step and locality — here’s what the 2026 limits actually look like as a slice of your pay:

• Contributing the full $24,500 is roughly 27% of a $90,000 salary.

• Hitting $32,500 (with age-50 catch-up) is about 36%.

• Going all the way to $35,750 at ages 60–63 is close to 40%.

Most people won’t max out every year and that’s okay.

What matters more is aiming at the right target for your situation, instead of treating the IRS maximum as the only scorecard.

So how much should that same GS-12 aim for?

There’s no one perfect answer, but here’s a practical way to think about it.

1. The bare minimum: 5% of pay

If you’re under FERS or the Blended Retirement System, your first goal is simple:

That unlocks the full government contributions:

• 1% automatic agency/service contribution

• Up to 4% match on what you put in

On a $90,000 salary… 5% is $4,500 from you — plus up to $4,500 from your agency.

That’s already 10% of your pay heading into retirement savings.

If you’re below 5% right now, your 2026 “assignment” pretty much writes itself: step up gradually until you hit that 5% mark.

2. The “healthy default”: 10–15% total

Once you’re getting the full match, the next level is a total retirement savings rate (you + government) in the 10–15% of pay range.

For that same GS-12 at about $90,000:

• 10% of pay = $9,000

• 15% of pay = $13,500

That could like 7–10% from you plus 5% from the agency to have a total retirement savings rate in that 12–15% zone.

This is a solid target for:

• Mid-career GS-12s

• Those with 10–20 years of service

• People who are on track, but not trying to “sprint” yet

3. The “retirement sprint”: close to (or at) the max

If any of these are true:

• You’re within ~10 years of retiring

• You started saving late

• You’re aiming to dial back work earlier and want more flexibility

Then 2026 might be the year to treat the IRS limit as a serious goal, not just fine print.

That could look like:

• Under 50: working your way toward $24,500

• Age 50–59 or 64+: trying to get as close as you reasonably can to $32,500

• Ages 60–63: using the $35,750 window as a deliberate “last lap” push

You don’t have to jump there overnight. But even moving from, say, 8% to 12% this year is a meaningful step in the right direction.

But what if you’re already retired and still working?

A lot of FERS and CSRS retirees eventually come back to work — either in a rehired annuitant role or in the private sector with a 401(k).

Luckily, your pension annuity doesn’t restrict your IRS limit.

If you’re working in a job that offers TSP or a 401(k) in 2026, you still get the full contribution room in that plan — up to the same $24,500 (plus any catch-up), subject to the usual rules.

For working retirees, that creates a powerful combination:

• Your pension checks cover a lot of the basics

• Your paycheck can be partially “rerouted” straight into your TSP/401(k)

• And your TSP can become more of a future tax-management and flexibility tool than a pure survival account

That’s why many working retirees choose to push contributions higher than they could during their main career…

Or shift more into Roth, since they already have significant pre-tax balances built up.

The new 2026 limits don’t just give you more room — they give you a chance to be more intentional.

As a GS deciding how aggressive you want to be or as a working retiree deciding how much more you want to shore up the future.

Best,
—FWR