To help people save more for retirement, Congress passed the Setting Every Community Up for Retirement Enhancement Act of 2022 (SECURE 2.0), which President Biden signed into law on December 29, 2022.
Several provisions in the new law affect the TSP and how TSP participants contribute to and use their TSP savings. On this page, you’ll find summaries of those changes, their effective dates, and which participants they affect.
This page was last updated on January 1, 2024. We’ll continue adding information about how SECURE 2.0 may affect you as a TSP participant as information becomes available. Please check this webpage periodically for new information.
Required minimum distribution (RMD) changes
RMD age increases
Section 107
SECURE 2.0 increases the age you must begin taking RMDs from your TSP account. The start age for RMDs increased from 72 to 73 starting on January 1, 2023. The start age will further increase to 75 on January 1, 2033.
Status
In effect
Affected
Participants born after December 31, 1950
Reduced excise tax on missed RMD amount
Section 302
If you don’t take the full amount of your RMD in a given year, you may be subject to an IRS excise tax. SECURE 2.0 reduced that tax from 50% to 25% of the amount not paid to you on time. It further reduces the excise tax to 10% of that amount if you meet the conditions of section 4974(e) of the Internal Revenue Code, and the RMD is timely corrected within two years.
Status
In effect
Affected
Participants who must take RMDs
Roth balance no longer subject to RMDs
Section 325
Roth balances are no longer subject to RMDs prior to a participant’s death. Your RMD calculation includes only your traditional balance, and only distributions from your traditional balance count toward satisfying the RMD amount.
If you have a Roth balance in your TSP account, this means your RMD amount may be less than it would have been before 2024.
Calculations for RMDs from spouse beneficiary participant accounts still include the entire account balance, and any distribution from a spouse beneficiary participant account still counts toward satisfying the RMD.
Status
Effective for tax year 2024 and later
Affected
Participants with a Roth balance and subject to RMDs in 2024 and later
If your first distribution calendar year was 2023, your RMD calculation for 2023 includes your entire TSP account balance—both Roth and traditional—even if you take your 2023 RMD in 2024.
Contributions changes
Future change: Higher catch-up limits at age 60, 61, 62, and 63
Section 109
Beginning January 1, 2025, participants age 60, 61, 62, and 63 who are eligible for catch-up contributions will have a higher catch-up limit than participants who are younger or older. For these participants, the IRS catch-up contribution limit increases to the greater of $10,000 (indexed to inflation) or 150% of the regular catch-up limit.
Status
Effective January 1, 2025
Affected
Participants age 60, 61, 62, and 63 who are eligible for catch-up contributions
Future change: Catch-up contributions must be Roth if prior year wages above a certain amount
Section 603
Beginning in 2026, eligible catch-up contributions must be Roth contributions if your wages from TSP-eligible positions are above a certain threshold. The IRS wage threshold will be adjusted for inflation and announced by the IRS each year. (When this law passed in 2022, the original wage threshold was set at $145,000 for 2023 wages.)
In general, the wages that determine whether this rule applies to you are equal to Medicare wages listed in box 5 of your W-2(s).
For future planning: This means, if your wages for 2025 are greater than the wage threshold and you’re eligible to make catch-up contributions, any catch-up contributions you make for 2026 will go to your Roth balance. Because Roth contributions go into the TSP after tax withholding, you’ll pay taxes on that amount at your income tax rate.
Beginning in 2026, if this provision applies to you and your contribution election includes savings to your traditional TSP balance, your contributions will change automatically to all Roth TSP contributions once you meet the annual elective deferral limit (or annual additions limit if making traditional contributions from tax-exempt pay in a combat zone).
If you hold multiple TSP-eligible positions during a given year, the sum of those wages will be subject to this rule. Wages from outside employment with a different employer or under a different retirement plan are separate.
Status
Effective January 1, 2026 (based on wages earned in 2025)
Affected
Beginning in 2026, participants eligible for catch-up contributions with prior year Medicare wages above the 2025 wage threshold (announced by the IRS) from TSP-eligible positions
Withdrawals and distributions changes
Exemption from 10% early withdrawal penalty for public safety employees
Section 329
If you’re a qualified public safety employee as defined in 29 U.S.C. 72(t)(B) of the Internal Revenue Code, your distributions won’t be subject to the 10% early withdrawal penalty if you’ve separated from service and have 25 years of service under the Plan, even if you haven’t yet reached age 50 when you separate.
Status
In effect for tax year 2023 and later
Affected
Public safety employees
Substantially equal periodic payments clarification
Section 323
When a participant meets the requirements for an exception to the 10% early withdrawal penalty by receiving substantially equal periodic payments, the exception continues to apply in the case of a rollover of the account (if payments continue) or an annuity purchase that satisfies the required minimum distribution rules.
Status
In effect
Affected
Separated participants receiving substantially equal periodic payments to meet requirements for an exception to the 10% early withdrawal penalty
Roth funds to SIMPLE and SEP IRAs
Section 601
SECURE 2.0 allows Roth contributions to SIMPLE (Savings Incentive Match Plan for Employees) IRAs and SEPs (simplified employee pension plans). This means that you can roll over money from your Roth TSP balance to these types of plans.
Status
In effect
Affected
Participants with a SIMPLE IRA or SEP plan
Other changes
Extended benefits for judges of the Tax Court
Sections 701 and 702
SECURE 2.0 extends several retirement benefit options to judges of the Tax Court that align with the options that other federal judges have.
Status
In effect
Affected
Judges of the Tax Court
