If you’re 50 or older and made over $150,000 last year, your TSP catch-up contributions in 2026 have to go Roth, whether you chose that or not. In my work as a financial planner for federal employees, this is one of the 2026 changes I’m getting the most questions about, so here’s who it hits and what to check before December 31.
The Rule and Who It Hits
This comes from Section 603 of the SECURE 2.0 Act, and it’s been in effect for the TSP since January 1, 2026. Two things have to be true for it to apply to you:
- You’re age 50 or older by December 31, 2026.
- Your 2025 Social Security wages from your federal job were over $150,000. That’s the number in Box 3 of your W-2 from the employer that offers your TSP. The threshold started at $145,000 and is indexed for inflation.
If your wages were under $150,000, nothing changes. You still get to choose Traditional or Roth for your catch-up.
What Changes
The 2026 regular TSP limit is $24,500. On top of that, you can add a catch-up of $8,000 if you’re 50 or older, or $11,250 if you’re turning 60 through 63. The Roth rule applies only to that catch-up portion. Your regular $24,500 isn’t affected, and you can still choose Traditional or Roth for it.
If you already make Roth contributions during the year, those count toward the requirement.
What It Means for Your Paycheck
Roth contributions don’t give you a tax break now, so your take-home pay will be a little lower in the pay periods where your catch-up kicks in. For example, if you’re in the 22% bracket, putting an $8,000 catch-up into Roth instead of Traditional means about $1,760 more in federal tax for 2026.
That’s not a penalty. You’re paying the tax now instead of later, and qualified Roth withdrawals in retirement are tax-free.
Is It Automatic?
It depends on your payroll office. The TSP says the switch to Roth “happens automatically for most people” once you hit the $24,500 regular limit. But the National Finance Center (NFC) says employees must make their own elections.
So don’t assume. Check your earnings statement (LES) and make sure your catch-up is actually landing in Roth.
What Doesn’t Change
A few things people worry about that aren’t true:
- You can still make catch-up contributions. High earners don’t lose the catch-up. It just has to be Roth.
- Your regular contributions aren’t affected. The rule applies only to the catch-up.
- Only wages from the employer that offers your TSP count. Wages from a separate employer aren’t combined for the $150,000 test.
Your 3-Step Check Before December 31
- Find your catch-up contributions on your latest LES.
- Confirm they’re going into Roth, not Traditional.
- Make sure your election is set to hit the maximum by year-end. There are only a handful of pay periods left.
Looking Ahead to 2027
The $150,000 threshold is indexed for inflation, so it will likely rise for 2027. The IRS hasn’t announced the new number yet. Last year it released the 2026 figures on November 13, so watch for an announcement in the next few weeks.
Final Thoughts
This isn’t bad news. You can still save the same amount in your TSP. But it is a tax change you didn’t choose, and it can affect your paycheck and your tax bill this year. Take five minutes to check your LES and make sure your plan accounts for it.
If you’re a federal employee within 12 months of retirement, or already retired, with $1 million or more invested, book a free 15-minute Fit Call to see if we can help: https://app.hawsfederaladvisors.com/whatservicemakessense
Dallen Haws, CFP®, is the founder of Haws Federal Advisors, which helps federal employees plan their retirement. This article is educational only and is not tax, investment or legal advice. HawsFederalAdvisors.com