There are only about 11 weeks left in 2026. In my work as a financial planner for federal employees, the end of the year is when I see the most money left on the table, because most of the best tax moves have a December 31 deadline and can’t be done after.
Here are eight moves federal employees and retirees should check before the year ends. You won’t need all of them. Pick the two or three that fit your situation and do them this month.
Move 1: Max Out Your TSP
The 2026 TSP contribution limit is $24,500. If you’re 50 or older, you can add an $8,000 catch-up. If you’re turning 60 through 63 this year, that catch-up jumps to $11,250, for a total of $35,750.
TSP contributions come out of your paycheck, so with only a handful of pay periods left, the sooner you raise your election, the more room you have to reach the limit.
Move 2: Over $150K? Check That Your Catch-Up Is Going Roth
This one is new for 2026. If you’re 50+ and your 2025 Social Security wages from your federal job were over $150,000, your catch-up contributions must go into the Roth TSP. Look at your latest earnings statement to confirm it’s landing in Roth, because depending on your payroll office it may not happen automatically. I cover this in detail in my Fed News video on the Roth catch-up rule.
Move 3: Use the Roth Conversion Window
Since January 28, 2026, you can do Roth conversions inside the TSP. No IRA needed. A conversion means paying tax now on money you move from Traditional to Roth, in exchange for tax-free growth and withdrawals later.
The key is to fill your current tax bracket without spilling into the next one. And watch your Medicare premiums: your 2026 income determines whether you pay IRMAA surcharges in 2028.
Move 4: Take Your RMD by December 31
If you’re 73 or older, your required minimum distribution must be out by December 31. The one exception is your very first RMD, which can wait until April 1 of the following year. Just know that waiting means taking two RMDs in the same tax year, which can push you into a higher bracket.
Move 5: Give to Charity From an IRA, Not the TSP
If you’re 70½ or older and give to charity, a qualified charitable distribution (QCD) lets you give directly from an IRA without the money counting as taxable income. In 2026 you can give up to $111,000 this way.
The catch for feds: the TSP can’t do QCDs. If this strategy fits you, you’d need to move some money from the TSP to an IRA first, so start early enough to finish before December 31.
Move 6: Know Where You Land on the New Senior Deduction
For tax years 2025 through 2028, taxpayers 65 and older get an extra deduction of up to $6,000 per person. It phases out once your modified adjusted gross income goes above $75,000 if you’re single, or $150,000 if you’re married filing jointly. If you’re close to those levels, a Roth conversion or a large withdrawal could shrink your deduction, so run the numbers before you act.
Move 7: Use It or Lose It
Two balances can disappear at year-end:
- FSAFEDS. The IRS allows up to $680 to carry over into 2027, but check your own FSAFEDS account rules. Anything above what carries over is lost.
- Annual leave. Hours over your carryover limit are forfeited when the leave year ends on January 9, 2027. If you want to use that leave, it generally needs to be scheduled by November 28.
Move 8: Check Your Withholding
If you’re retired, make sure enough tax is being withheld from your annuity and any TSP withdrawals. Underwithholding is one of the most common surprises I see in a retiree’s first tax season.
If you’re still working, think about whether anything changed this year, like a marriage, a new child or a spouse’s job. Any of those can mean your W-4 needs an update.
Final Thoughts
You don’t need to do all eight of these. Most federal employees will find two or three that apply: maxing out the TSP, checking the Roth catch-up, or using some of the room left in their tax bracket. The important thing is to do them now, while there’s still time, rather than finding out in April that the window closed.
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