Dear participants,
Welcome to the start of a new year, with all the optimism and fresh motivation that comes with it. I have plenty of good news to share about your Thrift Savings Plan. It’s news that I hope will increase your confidence in the TSP on your journey to and through retirement.
Low expenses. Reliable service.
At the TSP, our mission is to act solely in the interests of our participants and beneficiaries. We are dedicated to serving you while keeping administrative expenses low, so that more of your money stays in your account and continues to grow for your retirement. In fact, did you know the TSP’s expenses are lower than 99% of investment options? We keep our operational expenses low, and whatever we don’t spend stays in the TSP and continues earning for you.
The TSP remained open and available for all transactions during the 2025 lapse in appropriations. We were proud to help participants and were encouraged by their expressions of gratitude. “Thank you for working through the shutdown,” one participant wrote. “I was thankful for being able to speak with someone and feel a sense of relief that the TSP is still functioning,” commented another.
The Lifecycle Funds: Working for you
The Lifecycle Funds (L Funds) are designed to help you invest with confidence, no matter where you are on your retirement journey. In June, we introduced the L 2075 Fund, which is designed for participants who were born after 2009 or expect to begin withdrawing from their account sometime around 2075.
Each of the TSP’s eleven L Funds is designed to grow your savings while managing risk based on when you’ll need to withdraw retirement income. The L Funds rebalance daily and become more conservative over time, shifting from stocks (C, S, and I Funds) to more stable investments (G and F Funds) as you get closer to retirement. The L Funds buy shares as they go down in price and sell shares as the price increases, keeping your investments on track without you having to time the markets.
So, what's in store for 2026? Plenty.
As of the end of January 2026, you have the option to convert money in your traditional (pre-tax and tax-exempt) balance into a Roth (after-tax) balance through a “Roth in-plan conversion.” If you don’t have a Roth balance in your TSP account, your first Roth in-plan conversion can create one. You’ll need to pay taxes on the money you convert to Roth, and you cannot pay them out of your conversion amount. The taxes will need to be paid with personal funds from a separate account.
If you’re wondering if a Roth in-plan conversion is right for you, we strongly recommend you consult a tax advisor. You’ll want to consider how it will affect your taxable income for the year and how it will fit into your long-term financial plan.
There’s another change in 2026 that may affect you if you’re turning 50 or older. If you plan on making catch-up contributions, which are designed to allow older participants to save a higher yearly amount as they approach retirement, and you earned more than $150,000 in wages during 2025, those contributions must be Roth. If this applies to you, we will make it as easy as possible to comply. For most, once your total traditional contributions reach the IRS elective deferral limit of $24,500, any additional contributions you make will be contributed automatically as Roth—there’s nothing you need to do. If you already made Roth contributions during the year, those count toward the Roth catch-up requirement.
Reminders for 2026
As you make your own plans for the coming year, here are some reminders for good management of your TSP:
- Log in to My Account on tsp.gov periodically to ensure your contact information and any beneficiary designations are up to date. If you’re having trouble logging in, call our ThriftLine for help at 877-968-3778. It’s one of many tasks our team can assist you with.
- Add your direct deposit information in My Account today. Adding this information now can help you get your money much faster when you need it.
- Protect your account. Remember, we will never call you to ask for a username, password, ThriftLine PIN, or one-time passcode. If you are unsure about correspondence or calls claiming to be from the TSP, do not provide any personal or financial information. Contact us directly if you have questions or if you need to report suspicious activity.
- If you get a raise, consider increasing the amount you contribute to your TSP. You can channel more money to your retirement without feeling a pinch. You’ll have to do this through your agency or service payroll system.
- Consider setting up emergency savings outside the TSP. According to our recent Financial Wellness Survey, nearly 8 in 10 TSP participants have separate savings set aside for emergencies. And studies show those who have emergency funds are less likely to borrow from their retirement savings while still working.
Stay with the TSP
Currently, more than 2.5 million participants who have separated from government service—military or civilian—have chosen to keep their retirement savings with us. If you are one of them, thank you for your continued trust in the TSP. For everyone else, please know that when you leave public service, you too can stay with the TSP and continue to enjoy our reliable service and low expenses. Participating in the TSP is a benefit you have earned, and it doesn’t have to end just because you leave federal service.
My wish for all of us in 2026 is stability, security, and progress toward the goals we set for ourselves.
Sincerely,
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