Great news for federal employees! The Thrift Savings Plan (TSP) contribution limits for 2025 have increased, allowing you to save even more for retirement. Whether you’re just starting out or you’re well on your way to building a secure financial future, these changes offer you a great opportunity to maximize your retirement savings in the new year. Let’s break down the key updates and what they mean for you.
2025 TSP Contribution Limits: Bigger Savings, Bigger Benefits
For 2025, the Internal Revenue Service (IRS) has raised the annual contribution limits for retirement savings plans, including the TSP. Here are the key changes:
- Standard Employee Contribution Limit: The limit for employees under 50 years old will increase to $23,500 (up from $23,000 in 2024). This means you can contribute an additional $500 in 2025 toward your TSP, allowing you to build your retirement nest egg faster.
- Catch-Up Contribution Limit: If you’re 50 or older, you’re eligible for catch-up contributions. These are extra employee contributions above the standard limit to help accelerate retirement savings as you approach retirement age. For 2025, the standard catch-up contribution limit is holding steady at $7,500; meaning that those age 50 and over can save a total of $31,000 to their TSP in 2025.
- For those turning 60, 61, 62, or 63 in 2025: SECURE Act 2.0, which was signed into law in 2022, has a special surprise for those turning age 60, 61, 62, or 63 in 2025. These folks get to make a larger catch-up contribution of $11,250—not $7,500—into their TSPs on top of their regular employee contribution for an extra retirement savings boost. Note: if you are turning 64 or older in 2025, your catch-up contribution is limited to just $7,500.
Sound confusing? It is! But don’t worry—we have a chart that will hopefully make things a bit easier to sort out:
| TSP Annual Employee Contribution Limits by Age | |||
| Age (in 2025) | Regular contribution limit | Catch-up Contribution Limit | Total Annual Employee Contribution Limit |
| Age 49 and under | $23,500 | $0.00 | $23,500 |
| Age 50 to 59 | $23,500 | $7,500.00 | $31,000.00 |
| Age 60-63 | $23,500 | $11,250.00 | $34,750.00 |
| Age 64 and up | $23,500 | $7,500.00 | $31,000.00 |
Remember—these contribution limitations only pertain to what you’re putting in as an employee contribution. Your employer match is excluded from the contribution limit since your employer is putting that money in on your behalf.
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Why These Increases Matter for Feds
As a federal employee, the TSP is one of your most powerful retirement savings tools. The ability to save more in 2025 means you have an even greater opportunity to increase your retirement savings, especially if you plan to retire in the near future or want to make up for past years of lower savings.
How to Take Advantage of the New Contribution Limits
To take full advantage of the increased contribution limits, consider the following steps:
Review Your Current Contribution: Log in to your TSP account and review how much you are currently contributing. If you're under the new limit, consider increasing your contribution to maximize your savings for 2025.
Consider Catch-Up Contributions: If you're 50 or older, make sure you’re taking advantage of the catch-up contribution option. This allows you to contribute more than the standard limit, boosting your retirement savings potential.
Set Up Automatic Increases: If you have automatic contributions set up, check if your contribution amount needs to be adjusted for 2025 to stay within the new limits. Some TSP accounts allow you to automatically increase your contribution each year, which could be a great option to consider. For more on that strategy, check out our article here.
Reevaluate Your Retirement Goals: Use this opportunity to reassess your retirement savings goals. Do you want to retire earlier or with more savings? Increasing your TSP contributions can help you meet these goals more quickly.
What’s Next?
By raising the contribution limits for 2025, the IRS is giving federal employees more flexibility to save for the future. Whether you’re aiming to retire early, increase your retirement security, or simply take advantage of the tax benefits, these new limits are a fantastic opportunity. Make sure you take action before the end of the year to set yourself up for success in 2025!
In addition to the increased contribution limits, 2025 brings other important updates to federal retirement benefits and financial planning options. Stay informed so you can continue to make smart decisions about your financial future by subscribing to our weekly newsletter, The Weekly Serving, here.
At Serving Those Who Serve, we’re committed to helping you navigate these changes and make the most of your federal benefits. If you have any questions about how to optimize your TSP contributions or need personalized advice, don’t hesitate to reach out to us at [email protected]. Our team is here to help you build a solid foundation for your retirement.
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Katelyn Murray, CFP®, ChFEBC℠, FBS®, CFT-1™: Relationship Team Lead & Financial Planning Expert
Katelyn is a financial advisor with over a decade of experience working with Feds to build a healthy, balanced relationship with money and to design and enjoy the retirement of their dreams. In addition to her CERTIFIED FINANCIAL PLANNER™ and Chartered Federal Employee Benefits Consultant℠ designations, Katelyn also holds a Master in Business Administration as well as a graduate certificate in financial psychology and behavioral finance. Her unique approach merges financial psychology with traditional wealth management expertise to create an integrated financial planning approach that helps clients make the most of the one resource they can’t get more of: time.
Here at Serving Those Who Serve, Katelyn serves as our Director of Relationship Management, mentoring our advisors and guiding our client experience. She also co-hosts The Fed15 podcast each week with STWS founder Dan Sipe.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
**Written by Katelyn Murray, CFP®, ChFEBC®, FBS®, CFT-1™, ECA. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Katelyn Murray and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
