TSP Catch up 2025 - Thrift Saving Plan

TSP Catch up 2025 Contributions Limit (IRC Section 414(v)) – 2025

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The tsp catch up 2025 contribution limit under IRC § 414(v) for 2025 is $7,500.

Key Information:

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Participants who are 50 years old or turning 50 during 2025 will have any contributions exceeding the elective deferral or annual additions limit automatically redirected to the catch-up limit.

For further details on catch-up contributions and the spillover method, refer to TSP Bulletin 20-1: Spillover Method for Catch-Up Contributions to the Thrift Savings Plan – UPDATE.

Changes Under SECURE Act 2.0:

As per Section 109 of the SECURE Act 2.0, the tsp catch up contributions 2025 limit is $11,250 for participants reaching the ages of 60, 61, 62, or 63 in 2025.

Once participants turn 64 or older, the catch-up limit reverts to the standard amount of $7,500.

Elections will automatically renew each year unless a participant submits a new request.

Here Is The Breakdown for 2025 TSP Catch Up 2025 Contribution Limits

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Standard Catch-Up (Age 50 and Over):

• Participants aged 50 or older can make catch-up contributions of up to $7,500.
• This is in addition to the regular contribution limit of $23,500, allowing for a total contribution of $31,000.

Higher Catch-Up (Ages 60-63):

• Individuals turning 60, 61, 62, or 63 in 2025 qualify for an increased catch-up contribution limit of $11,250.
• This raises the total possible contribution to $34,750.

SECURE Act 2.0:

Enacted in 2022, the SECURE Act 2.0 introduced these higher catch-up contribution limits for individuals in the 60-63 age group.

Spillover Method:

If eligible for TSP catch-up contributions, any contributions exceeding the $23,500 regular TSP limit will automatically be applied toward the catch-up limit under the spillover method. For more info. you can also read the TSP rule 55.

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Limits for Participants with Both Civilian and Uniformed Services TSP Accounts

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For individuals contributing to both a civilian and a uniformed services Thrift Savings Plan (TSP) account within the same year, the elective deferral and catch-up contribution limits apply to the combined total of traditional (tax-deferred) and Roth contributions made across both accounts.

Exceeding Contribution Limits:

Once IRS contribution limits are reached, any additional contributions will be rejected, and an error message will be sent to the participant’s agency or service payroll office.

For more details on what happens when contribution limits are exceeded, refer to the fact sheet: Annual Limit on Elective Deferrals (Part II: Participating in the TSP and Another Tax-Deferred Retirement Plan).

Tax Reporting for Excess Contributions:

The traditional (tax-deferred) portion of refunded excess contributions must be reported as income in the year the contributions were made.

Payroll offices must not adjust the deferral amounts in Box 12 of IRS Form W-2 for participants who exceed the elective deferral or catch-up contribution limit by contributing to both a civilian and uniformed services TSP account.

Any earnings on refunded excess contributions must be reported as taxable income for the year in which the funds are returned by the TSP.

The TSP will issue a separate IRS Form 1099-R for the earnings portion of the refund.

Agency/Service Responsibilities For TSP Catch up Contributions 2025

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Contribution Limits

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Payroll offices must account for the additional catch-up contribution limit each year. If a participant qualifies for the higher catch-up contribution limit under Section 109, payroll offices must ensure contributions are processed correctly.

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In 2025, the higher catch-up contribution limit will be the greater of:

• $10,000
• 1.5 times (or 50% more than) the standard § 414(v) catch-up contribution limit

💡 Note: The $10,000 threshold will be adjusted for inflation starting in 2026.

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Example:

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If the same contribution limits apply in 2025, a participant aged 60–63 can contribute up to $34,250 instead of $30,500. This includes:

• $23,000 towards the elective deferral limit
• $11,250 in catch-up contributions

🚨 This example is for illustration only. The IRS releases official contribution limits annually.

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Special Considerations for Uniformed Services Members

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• No changes have been made to tax-exempt contributions.
• Tax-exempt contributions to a uniformed services TSP account do not count toward the elective deferral limit.
• These contributions are subject to the IRC 415(c) annual additions limit instead.
• If participants aged 50 or older reach the annual additions limit, regular employee contributions must stop, and catch-up contributions must begin.
• Tax-exempt catch-up contributions must be Roth, as traditional tax-exempt contributionscannot be used for the catch-up limit under current TSP regulations.
• All other catch-up contributions must comply with the rules outlined in “Submitting Catch-Up Contributions for Participants Ages 60–63.”

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FAQ

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What is the TSP catch-up limit for 2025?

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Dave Ramsey recommends the following strategy for TSP contributions:

Contribute 5% to your TSP to take full advantage of the employer matching contributions.

Max out a Roth IRA, if eligible, for additional tax-free growth.

If you can save more, return to the TSP and continue contributing beyond the matched amount.

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What is the TSP catch-up rule?

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Once you turn 50 or older, if your contributions exceed the IRS elective deferral limit, they will automatically count toward the catch-up contribution limit.

Simply continue adding contributions in the same section as your other TSP contributions, and the system will allocate the excess towards catch-up contributions.