Federal Law Enforcement Officers: New TSP Roth Catch-Up Rules to Know Before Retirement
If you’re a Federal Law Enforcement Officer (LEO) in your 50s and within a few years of retirement, chances are you’re doing what you should be doing — maximizing your Thrift Savings Plan (TSP) and taking advantage of catch-up contributions.
What many LEOs don’t realize is that a new rule quietly changes how catch-up contributions are taxed for higher earners. It doesn’t stop you from saving — but it does change how part of your contributions flow through your paycheck and tax return.
This is one of those rules that’s best understood before it shows up unexpectedly.
What’s Changing with TSP Catch-Up Contributions?
The new Roth requirement starting in 2026
Beginning in 2026, if you:
- Are age 50 or older, and
- Earn more than about $150,000 (indexed for inflation) in the prior year
Then any catch-up contributions you make must be made as Roth (after-tax) contributions rather than Traditional (pre-tax).
For most federal LEOs approaching retirement, that income threshold is very much in play — especially once you factor in step increases, overtime, and specialty pay.
You can still make catch-up contributions. The change is how those dollars are taxed, not whether you’re allowed to save them.
What hasn’t changed
You can still make catch-up contributions. The change is how those dollars are taxed, not whether you’re allowed to save them
How the New Roth Catch-Up Rule Affects Federal LEOs
Catch-up contributions vs. regular TSP contributions
A few key clarifications that matter specifically for TSP participants:
- This rule applies only to the catch-up portion of your TSP contributions
- Your regular TSP contributions can still be Traditional or Roth, just like today
- You can still max out the TSP — the change is about tax treatment, not contribution limits
Why this matters near retirement
If you’ve been relying on pre-tax catch-ups to reduce taxable income, that assumption may no longer hold — especially in the final working years.
How the IRS Determines “High Earner” Status
It’s based on prior-year W-2 wages
The IRS determines whether the rule applies based on:
- Your prior-year W-2 wages
- From the federal employer sponsoring the TSP
What doesn’t count
It has nothing to do with:
- Household income
- Your spouse’s income
- Your tax bracket or total AGI
For example, your 2026 catch-up eligibility will be based on your 2025 W-2 wages.
Already Making TSP Catch-Up Contributions? Read This.
The immediate tax impact
If you’ve already been making catch-up contributions and those dollars have historically gone into the Traditional (pre-tax) TSP, here’s the practical impact.
Once those catch-ups are required to go into the Roth TSP:
- They will no longer reduce your taxable income
- All else being equal, your taxable income will rise slightly in that year
Why this isn’t a mistake
Nothing is “wrong” here — it’s simply a change in when the tax is paid, not whether it’s paid. You’re trading a tax break today for the potential of tax-free income later, and that tradeoff deserves to be evaluated intentionally.
Do Federal Employees Need to Take Action?
What happens automatically
In most cases, no immediate action is required.
The TSP and federal payroll systems will:
- Identify who crosses the income threshold
- Automatically route required catch-up contributions to Roth
What you should still review
That said, it’s still smart to:
- Review your paystubs
- Confirm your TSP elections
- Make sure changes align with your broader retirement and tax strategy
Is the Roth Catch-Up Rule Bad for LEOs Nearing Retirement?
Why the answer is often “no”
Not necessarily — and in many cases, it may actually be helpful.
Federal LEOs often retire:
- Earlier than the general workforce
- With a pension + TSP + Social Security income stack
- Into tax brackets that don’t drop as much as expected
The better planning question
For many, the better planning question isn’t:
“Can I deduct this contribution today?”
It’s:
“What tax rate will I be paying on this money in retirement?”
Why Roth dollars can help
Roth dollars can:
- Provide tax-free income
- Reduce future required minimum distributions
- Offer flexibility in managing retirement income and taxes
How We’re Handling This for Our Federal LEO Clients — and Why It Matters
Planning ahead instead of reacting later
This is not a rule we plan to react to after the fact.
For our current Federal Law Enforcement clients, we are already accounting for this change as part of our ongoing planning process.
What we’re doing specifically
- When we receive a client’s 2025 tax return, we note whether the Roth catch-up rule will apply
- As part of their 2026 annual tax planning, we model the impact of catch-up contributions shifting from pre-tax to Roth
- We assess how that change affects taxable income, withholding, and long-term retirement cash flow
- And we evaluate whether adjustments elsewhere — contribution mix, Roth conversions, or timing decisions — make sense in light of the change.
The goal is simple: no surprises in the final years before retirement, and no missed opportunities to be intentional about taxes.
For Federal LEOs Considering More Proactive Planning
When this applies to you
If you’re a Federal Law Enforcement Officer over 50 and within a few years of retirement, this catch-up rule is just one example of why a forward-looking tax strategy matters.
Common questions we hear
Many LEOs we speak with are:
- Unsure whether they should be leaning Traditional or Roth in the final working years
- Concerned about how their pension, TSP, and Social Security will interact from a tax perspective
- Looking for clarity — not guesswork — as retirement approaches
Next step: a no-stress Fit Meeting
If that sounds familiar, we invite you to schedule a no-stress Fit Meeting. It’s simply a chance to see whether our approach — proactive, tax-aware, and built specifically for Federal Law Enforcement Officers — is the right fit for you.
👉 Schedule your Fit Meeting here
FAQ
Q: Do Federal Law Enforcement Officers have to make Roth catch-up contributions starting in 2026?
A: Yes — if your prior-year wages exceed about $150,000, catch-up contributions must be made as Roth under SECURE 2.0.
Q: Does this change affect regular TSP contributions?
A: No. Only catch-up dollars are affected. Regular TSP deferrals can still be Traditional or Roth.
A: No. Only catch-up dollars are affected. Regular TSP deferrals can still be Traditional or Roth.
Q: Will my taxes go up because of the Roth catch-up rule?
A: Potentially — Roth contributions no longer reduce taxable income. Your taxable income may increase unless planning strategies are used.
A: Potentially — Roth contributions no longer reduce taxable income. Your taxable income may increase unless planning strategies are used.
Q: What should Federal LEOs do to prepare?
A: Review income thresholds, confirm TSP elections, and coordinate this change with tax planning before retirement.
A: Review income thresholds, confirm TSP elections, and coordinate this change with tax planning before retirement.
Final Thoughts
This catch-up rule isn’t something to worry about, but it is something to be aware of. Like many tax changes, it tends to reward those who plan ahead and quietly penalize those who assume yesterday’s rules will still apply tomorrow. With a thoughtful, forward-looking plan, changes like this become manageable — and often useful — rather than disruptive.
Last updated: December 2025
