Reviewing the end of Roth RMDs, in-plan conversions, and the new mandatory contribution rule that went into effect this year.  

Refresher: What Is the Roth TSP?

The Roth Thrift Savings Plan allows federal employees and uniformed service members to contribute after‑tax dollars to their retirement plan. Like a Roth IRA, qualified withdrawals, including earnings, are tax‑free if:

• The participant is 59½ or older, and
• The Roth TSP has been open for at least five years

With the removal of RMDs and the upcoming catch‑up rule changes, the Roth TSP is becoming an increasingly central tool in long‑term tax planning for federal employees.

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What Makes a Roth TSP Different from a Roth IRA?

For years, the differences between a Roth TSP and a Roth IRA came down to two major rules:

• Income limits
• Required Minimum Distributions (RMDs)

Federal employees have always been able to contribute to the Roth TSP regardless of income, while Roth IRAs phase out contributions at higher income levels. And until relatively recently, Roth TSPs were still subject to RMDs, unlike Roth IRAs. But since tax year 2024, that second difference is gone. Roth balances inside the Thrift Savings Plan no longer require RMDs, aligning the Roth TSP with Roth IRAs for the first time.

Therefore, the biggest remaining contrast between the Roth accounts now is that you can’t contribute to a Roth IRA if income is above a certain level ($168,000 for single filers and $252,000 for joint filers in 2026), but no there are no income restrictions

Plus, thanks to SECURE Act 2.0, two additional TSP contribution changes are now shaping how federal employees plan for retirement.

We’ll also look at how in-plan TSP Roth conversions might work for your financial plan.

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No More RMDs for Roth Accounts in the Thrift Savings Plan

Beginning in the 2024 tax year, Roth TSP accounts are no longer subject to lifetime RMDs. This is one of the most significant improvements to the federal employee savings plan in years.

Historically, RMDs were required because TSP withdrawals had to be taken pro‑rata from Traditional and Roth sources. That rule made it impossible to isolate Roth dollars from distribution requirements. But now, the rules are far more flexible. Withdrawals must still be taken proportionately from the funds (G, F, C, S, I) you’re invested in. But you can now choose how much comes from Traditional vs. Roth. This gives federal retirees significantly more control over:

• Tax‑efficient withdrawal sequencing
• Managing taxable income in retirement
• Preserving Roth dollars for long‑term, tax‑free growth

For advisors, this opens the door to more nuanced income‑planning strategies, especially when coordinating TSP withdrawals with Social Security, pensions, and outside IRAs.

Catch‑Up Contributions Must Go to Roth TSP for High Earners

2026 will be the first tax year where all catch‑up contributions for federal employees earning above a certain threshold must be made after‑tax into the Roth TSP. So, for IRAs, high income could restrict access to a Roth account, but with the TSP (for catch-up contributions at least), high income mandates the use of a Roth account.

Here’s the rule:

• If a federal employee’s federal salary exceeds $145,000 (indexed), their catch‑up contributions (age 50+) must be put in a Roth TSP.

Important clarifications for advisors:

• Only federal salary counts toward the $145,000 threshold
• Spousal income does not matter
• Outside income does not matter
• If a federal employee’s AGI is high but their federal salary is below the threshold, they may still make Traditional catch‑up contributions
• All agency matching contributions remain Traditional, regardless of employee choice

This rule will push many high‑earning federal employees toward larger Roth balances, which is a point advisors should proactively model for tax‑diversification and bracket‑management purposes.

Increased Catch‑Up Amounts for Ages 60–63

Another SECURE Act 2.0 change that went into effect for the 2025 tax year gives federal employees ages 60 to 63 a temporary “super catch‑up” window.

For 2025:

• Standard catch‑up (age 50+): $8000
• Additional age‑60–63 catch‑up: $11,250 ($8000 + additional $3,250)
• Regular TSP contribution limit: $24,500

This means employees ages who turn 60 – 63 this year can contribute up to $35,750 total in 2026.

This is a powerful planning window for late‑career savers, especially those preparing for early retirement, VERA offers, or RIF exposure.

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When Feds Should Consider Utilizing New In‑plan TSP Roth Conversions

Now fully available inside the Thrift Savings Plan since the end of January 2026, in-plan TSP Roth conversions allow federal employees to convert existing Traditional TSP balances into Roth TSP dollars without rolling funds out into an IRA first. The converted amount is added to taxable income for the year, so clients must have outside cash available to cover the tax bill.

A Roth conversion is generally most attractive when a client expects to be in a higher tax bracket later, but is currently in a low‑income year (such as the gap years between retirement and Social Security), wants to reduce future RMD exposure from Traditional accounts, or wants to build a tax‑free income “bucket” for long‑term planning and estate efficiency. Conversions are less appealing when the tax hit pushes the client into a higher bracket, triggers IRMAA surcharges, or strains liquidity.

The key is modeling the tax impact over multiple years so the conversion becomes a strategic move, not an expensive surprise. This is key area where federal employees need guidance from a financial professional they trust.