The federal 401(k), done right.

What the TSP actually is

The Thrift Savings Plan is the federal government's 401(k). It's the only retirement account most federal employees will ever max out. It's also the only retirement account most federal employees underuse.

For 2026, the elective deferral limit is $24,500. Add the age-50 catch-up and you can contribute $32,500. The new "super catch-up" for ages 60–63 allows up to $11,250 instead of $8,000, putting your maximum at $35,750 for those four years.

What this pillar covers

Asset allocation across the five core funds and lifecycle funds. Roth versus traditional contribution decisions. In-service withdrawals and the math against them. Roth conversion ladders for federal retirees. Required Minimum Distributions starting at age 73. Withdrawal sequencing once you stop working — lump sum, fixed installments, or annuity, and why most retirees should never touch the annuity option.

The TSP is where the federal pension stops being enough. A 20-year FERS pension replaces roughly 20% of your high-3. Social Security replaces another 25–35%. The TSP has to do the rest.

The core funds, ranked by what they actually do

• C Fund — S&P 500 index. The growth engine for most working-years portfolios.
• S Fund — small and mid-cap US stocks. Higher volatility, higher long-run returns.
• I Fund — international developed markets. Adds diversification, currency exposure.
• F Fund — US bond index. Interest-rate sensitive, real-life negative years.
• G Fund — the federal-government-only special. Cannot lose principal. Lower returns. Critical in the last 2 years before retirement.