Federal employees have unique retirement needs, so it’s important to follow savings guidelines designed for your situation. While private-sector benchmarks often suggest having six times your pre-retirement income saved by age 50, federal employees typically aim for a TSP balance around four times their annual salary. This lower target reflects the added security provided by the FERS pension. If you haven’t reached this level yet, there’s still time, especially with the ability to make catch-up contributions starting at age 50.
Maximizing Your Agency Match
Taking full advantage of your agency match is one of the easiest ways to boost your retirement savings. Federal agencies match up to 5% of your TSP contributions:
- The first 3% is matched dollar-for-dollar
- The next 2% is matched at 50 cents on the dollar
Over time, these contributions, when compounded, can have a significant impact. Once you reach the annual TSP contribution limit, any extra funds automatically count as catch-up contributions.
TSP Catch-Up Contributions for Age 50+
When you turn 50, you can contribute up to $7,500 in catch-up contributions in addition to the standard $23,500 TSP limit for 2025. Any contributions beyond the standard limit roll over to catch-up, and your agency continues matching up to 5% of your salary, further amplifying your savings.
Enhanced Catch-Up Contributions for Ages 60–63
Under the Secure Act 2.0, federal employees turning 60–63 can contribute even more. Starting in 2025, eligible participants can add an extra $11,250 to their TSP. Future increases will adjust with inflation, giving employees a substantial opportunity to maximize retirement savings and reach recommended balances before leaving federal service.
Why Federal Retirement Planning Is Different
Federal retirement planning is unique because most traditional advice focuses on private-sector employees without a pension like FERS. To navigate your TSP, pension, and other benefits effectively, consider working with a Federal Retirement Consultant (FRC®) who specializes in federal benefits and can help ensure your retirement strategy is on track.
