Can You Contribute to TSP After Retirement?

The Thrift Savings Plan (TSP) is a retirement savings and investment program for federal government employees and members of the uniformed services. It functions as a defined contribution plan, allowing participants to save a portion of their income for retirement. The TSP offers similar savings and tax benefits to those provided by 401(k) plans in the private sector.

TSP Contributions While Employed

While actively employed by the federal government, individuals can contribute to their Thrift Savings Plan (TSP) account through regular payroll deductions. These contributions can be directed into either a traditional TSP, which uses pre-tax dollars and offers tax-deferred growth, or a Roth TSP, where contributions are made with after-tax dollars, allowing for tax-free withdrawals in retirement. Employees can elect the specific percentage or dollar amount they wish to contribute from their paychecks.

Federal employees covered by the Federal Employees Retirement System (FERS) receive additional contributions from their agency. This includes an automatic 1% contribution of their basic pay, deposited into their traditional TSP account regardless of whether the employee makes their own contributions. Agencies also provide matching contributions on the first 5% of an employee’s basic pay contributed each pay period. To receive the full agency match, an employee contributes at least 5% of their basic pay.

The Internal Revenue Service (IRS) sets annual limits on the total amount an employee can contribute to their TSP. For 2025, the elective deferral limit is $23,500. Individuals aged 50 or older are eligible to make additional “catch-up” contributions of $7,500 for 2025, allowing a total contribution of $31,000. These limits apply to the sum of both traditional and Roth TSP employee contributions.

Eligibility for Contributions After Retirement

Upon separation from federal service, including retirement, an individual’s ability to make regular contributions to their Thrift Savings Plan (TSP) account ceases. This means that direct employee contributions, whether pre-tax traditional or Roth, can no longer be made through payroll deductions. The mechanism for contributing to the TSP is tied to active federal employment.

Similarly, agency contributions, including the automatic 1% and agency matching contributions, also discontinue once an individual is no longer an active federal employee. These agency contributions are contingent upon ongoing employment and are disbursed through the federal payroll system. Therefore, upon retirement or any other form of separation from service, these agency-provided funds will no longer be added to the TSP account.

The structure of the Thrift Savings Plan as a defined contribution plan, much like private sector 401(k)s, means that the inflow of funds is directly linked to an individual’s employment status. Once this employment relationship ends, the payroll system that facilitates both employee deferrals and employer contributions is no longer a viable channel for adding new money. While the accumulated balance remains within the TSP account for continued growth and management, new direct contributions are not permitted after an individual leaves federal service.

Adding Funds to Your TSP Account Through Rollovers

While new payroll contributions cease upon retirement, individuals can still add funds to their Thrift Savings Plan (TSP) account by rolling over eligible money from other qualified retirement plans. This includes funds from 401(k)s, 403(b)s, and traditional Individual Retirement Arrangements (IRAs) into a traditional TSP account. Similarly, Roth 401(k)s, Roth 403(b)s, and Roth 457(b)s can be rolled directly into a Roth TSP account, maintaining their tax-free growth potential.

The process involves two main methods: direct and indirect rollovers. A direct rollover occurs when funds are transferred electronically or via check directly from the originating plan to the TSP, without the funds passing through the participant’s hands. This method avoids mandatory tax withholding and potential penalties. The TSP offers an online tool or a concierge service to facilitate these direct transfers, where a specialist assists with the paperwork and coordination between institutions.

In contrast, an indirect rollover involves the funds being distributed to the participant, who then has 60 days to deposit the money into their TSP account. A drawback of indirect rollovers is the mandatory 20% federal income tax withholding from the distribution, which the participant must cover from other sources to roll over the full amount.

If the entire sum is not deposited within the 60-day window, the unrolled portion may be treated as a taxable distribution and potentially subject to a 10% early withdrawal penalty if the individual is under age 59½. The TSP does not accept indirect rollovers of Roth money or from Roth IRAs.

Managing Your TSP Account in Retirement

Even after contributions cease, your Thrift Savings Plan (TSP) account remains an active retirement asset requiring ongoing management. The accumulated balance continues to grow based on your chosen investment options within the TSP. Participants can continue to manage their investments across the available TSP funds:

G Fund (government securities)
F Fund (fixed income)
C Fund (common stocks)
S Fund (small capitalization stocks)
I Fund (international stocks)
Lifecycle (L) Funds, which are target-date funds that automatically adjust their asset allocation over time.

Retired participants retain full access to their account information through the TSP website or by contacting TSP directly. Regularly review and update beneficiary designations to ensure your account balance is distributed according to your wishes upon your death. The TSP also offers various withdrawal options for retirees, allowing access to funds as needed.