There’s no doubt about it, when it comes to managing your retirement savings, 2024 has been a volatile year. If you’re like most Americans, inflation and high consumer prices likely impacted your Thrift Savings Plan (TSP) strategy.
In fact, over the last few years surveys of retirement savers indicate that inflation is the top reason they were unable to contribute more to retirement accounts like the TSP and 401(k). With 2025 just weeks away, it’s important to review this end-of-year checklist to make sure you’re on track before you bid farewell to 2024.
Consider A TSP Conversion To A Roth IRA
Although the Thrift Savings Plan (TSP) does not allow a Roth IRA conversion, you may want to consider a two-step strategy. First, transfer your traditional TSP funds to a traditional IRA. Then convert that account to a Roth IRA. Keep in mind that the traditional TSP funds you convert will be subject to income taxes. That’s why it may be better to make this type of conversion over several years to save on taxes. When it comes to conversions, you can move money from a traditional IRA into your TSP account. But you cannot move money from a Roth IRA into your TSP account, even if you have a Roth TSP.
“Combined with the 2025 TSP contribution limit of $23,500, you can save as much as $10,000 and get free money with your 5% agency match.”
Develop A Plan To Max Out Your 2025 TSP Contributions
In 2025, the contribution limit for your TSP is $23,500 which is $500 more than the 2024 limit. The increase also applies to private-sector retirement accounts you or your spouse may have like 401(k), 403(b), and 457 plans. Catch-up contributions for federal workers between the ages of 50 and 59 years old are set at $7,500 in 2025. Combined with the 2025 TSP contribution limit of $23,500, you can save as much as $31,000 and get free money with your 5% agency match.
2025 Super Catch-Up Contributions For Working Feds Age 60 Through 63
Working feds who turn age 60, 61, 62, or 63 in 2025 can make higher Catch-Up contributions to their TSP. Nicknamed Super Catch-Ups, the new provision enables federal workers to make up for the years during their early career when they may not have been able to save more. Eligible TSP participants can make a Super Catch-up Contribution of up to $10,000 or up to 150% of the regular Catch-Up limit for those 50 and older — whichever is greater. For federal workers between the ages of 50 and 59 years old, Catch-Up contributions are $7,500 in 2025.
Connect with an FRC® trained advisor to learn how you can save even more for retirement in 2025.
