5% isn’t a TSP strategy
It gets the match. That’s all.
Under 5%? Fix that first. Anything less leaves agency money on the table.
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1. Why so many feds stop at 5%
FERS agencies put in 1% automatically, then match your first 3% dollar for dollar and the next 2% at 50 cents. Put in 5% and you get the full 5% from your agency. New hires are enrolled at 5% automatically.
That works: the TSP board reports about 89% of FERS participants get the full match. The trouble is that 5% becomes the setting nobody touches for 30 years. It was designed as a floor, not a retirement plan.
2. What 5% grows to, and what more buys
An $85,000 salary, 25 years, a 6% average return, no raises, with the full 5% match:
| You put in | Per pay period | Balance after 25 years | Income at 4% a year |
|---|---|---|---|
| 5% | $163 | ~$466,000 | ~$18,700 |
| 10% | $327 | ~$700,000 | ~$28,000 |
| 15% | $490 | ~$933,000 | ~$37,300 |
Each extra 5% of pay adds about $233,000 here. It costs $163 a pay period before tax; with traditional TSP, less after tax. Real results depend on raises, returns and your funds. For a fuller projection, see the TSP balance you should have at every age.
3. The limits for 2026 and 2027
| Limit | 2026 | 2027 (projected) |
|---|---|---|
| Regular contributions | $24,500 | ~$25,500 |
| Catch-up, age 50+ | $8,000 | ~$8,500 |
| Catch-up, ages 60–63 | $11,250 | ~$11,750 |
The 2027 figures are Milliman’s final projections; the IRS announces in early November. Per-pay-period amounts for each outcome are in 2027 TSP contribution limits.
The match is paid each pay period. Hit the limit early and you lose the match for the rest of the year. $24,500 ÷ 26 is $943 a pay period.
4. Catch-up contributions after 50
From the year you turn 50 you can add $8,000 more in 2026, and $11,250 in the years you turn 60 to 63. Since 2026, if your 2025 wages from your agency were over $150,000, your catch-up must go to the Roth TSP. Details are in TSP catch-up contributions.
5. How to raise it without feeling it
- Get to 5% now if you’re below it. That’s free money.
- Add 1% at each step increase or promotion. Your take-home pay still goes up.
- Pick Roth or traditional on purpose. See Roth vs traditional TSP.
- Check your funds, not just your rate. 5% sitting in the G Fund grows slowly. See G Fund vs C Fund.
Want to try different rates? Federal Warrior’s TSP contribution optimizer runs the per-pay-period math, and its contribution strategy guide goes deeper. Health costs are the other big retirement expense: Warrior Insure’s FEHB premium estimator shows yours. Also drawing VA disability? Warrior Disability’s calculator shows how it stacks with FERS.
6. Frequently asked questions
Is 5% enough to put in the TSP?
It is enough to get the full agency match: 1% automatic plus up to 4% matched, so 5% from you brings 5% from your agency. It is a floor, not a target. On an $85,000 salary over 25 years at 6%, 5% plus the match grows to about $466,000; 10% plus the match grows to about $700,000.
How does the FERS TSP match work?
Your agency puts in 1% of basic pay automatically. It then matches your first 3% dollar for dollar and the next 2% at 50 cents on the dollar. Contribute 5% and you get the full 4% match, for 10% of pay going in.
What are the 2026 TSP contribution limits?
$24,500 in regular contributions, plus $8,000 in catch-up contributions at age 50 or older, or $11,250 at ages 60 to 63. Since 2026, if your 2025 FICA wages from your agency were over $150,000, your catch-up contributions must go to the Roth TSP.
What will the 2027 TSP limits be?
The IRS has not announced them yet; it normally does in early November. Milliman’s final projection is $25,500, with an $8,500 catch-up at 50 or older and $11,750 at ages 60 to 63.
Should I contribute more than 5% if money is tight?
Get to 5% first, because anything less leaves free agency money behind. Then raise it 1% at a time, ideally when you get a raise or a step increase, so your take-home pay barely changes.
Illustrations assume a steady salary and a 6% average annual return; real returns vary and are not guaranteed. Not individual financial advice.