Wed. Jun 19th, 2024

IRS announces two-year delay to TSP catch-up contribution changes

August 28, 2023
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The Internal Revenue Service last week announced that it would delay implementation of new rules governing catch-up contributions in 401(k)-style retirement savings programs, including the federal government’s Thrift Savings Plan, until 2026.

Last December, Congress passed the SECURE 2.0 Act, a bill aimed at making it easier for people to save for retirement. Among the law’s provisions are reforms to expand automatic enrollment in employer-sponsored retirement plans and increasing the age at which people must begin taking required minimum distributions from their 401(k)-style retirement plans from the current 72 years old to 75.

The law also sets up new guard rails for catch-up contributions, the method by which people who are least 50 years old can contribute additional money toward their retirement accounts above the normal annual cap. By 2024, retirement plans, including the TSP, were set to require all participants making at least $145,000 per year to make catch-up contributions only via Roth—post-tax—accounts.

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