IRS Delays TSP Catch-Up Contribution Changes Until 2026

The Internal Revenue Service last week announced that it would delay implementing its new rules for catch-up contributions to the Thrift Savings Plan and other retirement savings programs until 2026.

The SECURE 2.0 Act requires all TSP participants who want to make catch-up contributions and earn at least $145,000 per year, make them as Roth or post-tax contributions, instead of pre-tax traditional accounts. The bill also increases the age for starting required minimum distributions (RMD) from the current 72 to 75.

The changes were set to take effect in 2024, but the IRS has postponed the implementation until after the “two-year administration transition period.” This means employees making at least $145,000 annually can continue to make catch-up contributions either as Roth contributions or as standard 401(k)-style contributions, until 2026.