2027 TSP, IRA, & HSA Contributions

The Internal Revenue Service has released the 2027 employer retirement plan and IRA contribution limits. Many of the contribution limits and deduction phase-out ranges are increasing in 2027.

For the full details, see IRS Notice 2026-66.

TSP & other employer sponsored plans (401(k), 403(b), 457(b))

*Based on 26 pay dates in 2027.

TSP under age 50

Total employee contribution: $25,500

$981 per pay period.

Yes, $981 (x) 26 = $25,506, but TSP will adjust the 26th contribution to ensure you don’t exceed $25,500.

TSP age 50-59

Total employee contribution: $34,000

$1,308 per pay period.

The $34,000 consists of the regular $25,500 plus an $8,500 catch-up for those who will be age 50 on or before December 31, 2027. You do not have to be age 50 on January 1, 2027, to start making these higher contributions, you just have to be age 50 on/before 12/31/27.

$1,308 (x) 26 pay periods = $34,008.

TSP age 60-63

Total employee contribution: $37,250

$1,433 per pay period.

The math: $25,500 regular + the new additional “super catch-up” which is $11,750 for 2027. This applies to anyone turning age 60, 61, 62, or 63 in calendar year 2027.

$1,433 (x) 26 pay periods = $37,258.

TSP age 64+

Total employee contribution: $34,000

$1,308 per pay period.

The $34,000 consists of the regular $25,500 plus an $8,500 catch-up for those who will be age 50 or older on/before December 31, 2027. Oddly enough, the “super catch-up” for those age 60, 61, 62, 63 stops once you turn 64. Because...Congress said so.

$1,308 (x) 26 pay periods = $34,008.

MANDATORY Roth Catch-Up Contributions

Section 603 of the SECURE Act 2.0 requires that catch-up contributions be made to the Roth "bucket" of your TSP if your Social Security wages (Box 3 on your W-2) in the prior calendar year exceeded a certain amount.

For 2027, the threshold is $155,000.

This means that if your 2026 Social Security wages (Box 3) exceeded $155,000, any catch-up contributions you make to your TSP in 2027 must be Roth contributions.

This Roth requirement ONLY applies to catch-up contributions above the base level contribution of $25,500.

Income LimitsThere are NO income limits for Roth TSP contributions.

There ARE income limits for Roth IRA contributions. See below for more on IRAs.

TSP Matching Contributions

If you contribute 5% of your basic pay, you’ll get a 5% match – free money (& time)! The 5% total match consists of 1% agency automatic contribution + 4% agency matching.

WARNING: Do not max-out your $25,500 elective deferral limit early if you plan to stay employed by the federal government for all of 2027. If you hit this limit before the end of the year, you’ll only get the 1% Agency Automatic contribution and miss out on the other 4% for the remainder of the year.

The employer match DOES NOT count against the $25,500 elective deferral amount you’re allowed to contribute.

Regardless of whether you contribute your portion towards Roth TSP or traditional TSP, you WILL still get the employer match. As of now, your matching contributions will go into your traditional TSP.

IMPORTANT: We see this all the time: “I started contributing towards the Roth TSP and lost my match”. Luckily, this is NOT true, it just got a different name on your paycheck. Note: This may differ based on your agency/payroll processor.

Traditional TSP contribution = the 5% government match shows up as “TSP Matching” on your paycheck.

Roth TSP contribution = the 5% government match shows up as “TSP GM” on your paycheck.

When to Make the Changes for TSP (*this is specific to Department of State direct hires)

You want these new contributions to be reflected in the first paycheck you receive in calendar year 2027, which for most is not the first pay period of 2027. To do this, make your changes so that they are “effective” in PP25. PP25 ends 12/26/26 and will be paid 1/7/27.

You can go into Employee Express and select any effective date 90-days out. If you submit the change in PP24, it will become effective on the first day of PP25, and will be reflected on 1/7/27, the first paycheck in calendar year 2027.

Note: Your agency pay periods and payroll processors may differ. Check with your agency for proper implementation.

Retiring in 2027

If you’re retiring in 2027, you may want to max out your TSP by the time you retire, since you’ll no longer be able to contribute when you separate from federal service. When I say you’ll no longer be able to contribute, I mean making contributions with new dollars via payroll deduction. You can still roll-in/transfer money from an eligible retirement account into the TSP, even after separation. Note: The TSP will not accept a roll-in of Roth IRA dollars.

There are a few ways to approach this depending on what you’re doing post-fed life.

(1) Leaving federal service and won’t work another job: If you’re looking to get the most money into a tax-advantaged account, you should try to max out your TSP by the time you retire.

(2) Leaving federal service + will work another job that offers a 401(k) or 403(b): Your TSP contributions and the contributions you make to your new employer’s 401(k) / 403(b) will be combined towards the annual elective deferral limit. So, if you’re age 55 and can contribute $34,000 to an employer plan ($25,500 regular + $8,500 catch-up), you could contribute $20,000 to your TSP and $14,000 to your new employer’s 401(k) / 403(b) for a combined total of $34,000 (or any other combination that gets you to $34,000).

(3) Leaving federal service + will work another job that offers a 457(b): Governmental 457(b) plans (typically offered by local/state government employers) are special for a few reasons. One of those reasons is that 457(b) contributions DO NOT count towards the TSP/401(k)/403(b) contributions. This means you could contribute $25,500 to your TSP and $25,500 to a 457(b) if your new employer offers it.

Individual Retirement Account (IRA)

An important distinction federal employees need to know is that an IRA is completely separate from their TSP.

The TSP is an employer sponsored retirement plan with its own set of rules. An IRA is a tax-advantaged retirement account that anyone can open on their own – it does not have to be through your employer. You must have EARNED income to contribute to an IRA.

For spouses, one spouse’s income can be used to fund both spouse’s IRA. So, if Spouse A is a stay-at-home parent with $0 income and Spouse B has $15,000 earned income, they could both make IRA contributions of $7,500.

An IRA can be opened at any low-cost custodian like Vanguard, Fidelity, or Schwab (examples, not advice). The “I” in IRA stands for individual, which means no joint IRAs.

2027 IRA Contribution Limits

IRA under age 50

Annual contribution limit: $7,500

IRA age 50+

Annual contribution limit: $8,600 if you will be age 50+ on/before 12/31/27. This limit includes the $7,500 regular contribution plus the 2027 catch-up amount of $1,100.

IMPORTANT: The annual IRA contribution limit is applied across all of your IRAs. The IRS views all of your IRAs as one giant IRA bucket, regardless of how many accounts you have, which custodians you use, or the tax treatment you choose (Roth vs traditional).

For example, if you’re under age 50 and want to invest $7,500 in 2027, you could technically do this:

-Vanguard Traditional IRA: $1,000 contribution

-Fidelity Roth IRA: $2,000 contribution

-Schwab Traditional IRA: $2,000 contribution

-Robo Advisor Traditional IRA: $1,000 contribution

-Big Bank Roth IRA: $1,500 contribution

= $7,500 dollars went into your total IRA bucket (regardless of the custodian holding the account)

Again, there ARE income limits for Roth IRA contributions.

There ARE NOT income limits for Roth TSP contributions.

Roth IRA Contribution Income Limits

There is an income phase-out to make direct Roth IRA contributions.

Single/Head of Household

Income below $158,000 = Full contribution

Income between 158,000-173,000 = Reduced contribution

Income above 173,000 = No contribution

Married Filing Jointly

Income below $250,000 = Full contribution

Income between $250,000-$260,000 = Reduced contribution

Income above $260,000 = No contribution

Married Filing Separately

Income below $0 = Full contribution

Income between $0- $10,000 = Reduced contribution

Income above $10,000 = No contribution

If your income makes you ineligible from making a regular Roth IRA contribution, the “backdoor Roth IRA” method may be a solution for you.

Traditional IRA Deductibility

You may be able to deduct your Traditional IRA contributions (reducing your taxable income). Your ability to deduct traditional IRA contributions depends on two things:

(1) Were you and/or your spouse covered by a retirement plan at work

(2) Your Modified Adjusted Gross Income (MAGI).

Single/Head of Household + you ARE covered by a workplace retirement plan:

Income below $83,000 = Full deduction

Income between $83,000- $93,000 = Reduced deduction

Income above $93,000 = No deduction

Married Filing Jointly + spouse making the contribution IS covered by a workplace retirement plan:

Income below $133,000 = Full deduction

Income between $133,000- $153,000 = Reduced deduction

Income above $153,000 = No deduction

Married Filing Jointly + spouse making the contribution IS NOT covered by a workplace retirement plan but their spouse IS covered by a workplace retirement plan:

Income below $250,000 = Full deduction

Income between $250,000- $260,000 = Reduced deduction

Income above $260,000 = No deduction

Married Filing Separately + you ARE covered by a workplace retirement plan:

Income below $0 = Full deduction

Income between $0- $10,000 = Reduced deduction

Income above $10,000 = No deduction

NEITHER you nor your spouse are covered by a workplace retirement plan:

You can take a deduction regardless of your income.

Remember, you can still make a full traditional IRA CONTRIBUTION if you exceed the income limits above, but you cannot take a DEDUCTION on your tax return (Form 1040 Schedule 1). In this scenario, where you've made a non-deductible IRA contribution, the contribution will need to be tracked as a non-deductible contribution when you file your taxes using IRS Form 8606.

Health Savings Accounts (HSA)

Note: The amount you can contribute is based on your HDHP coverage (self-only vs. self plus one vs. self and family). Also, the premium pass-through ($1,000 self/$2,000 family for FEHB GEHA HDHP) counts towards the annual contribution limit. The premium pass-through is a portion of your bi-weekly premium that gets deposited back in your HSA.

The HSA catch-up contribution for 2027 is $1,000.

Note: The age for HSA catch-up contributions is 55+, not age 50 like it is with IRAs and employer plans (why they couldn't align the ages on these catch-up amounts makes zero sense to me).

HSA Self-Only under age 55

Annual contribution limit: $4,500 minus the premium pass-through amount = your total contribution.

HSA Self-Only age 55+

Annual contribution limit: $5,500 minus the premium pass-through amount = your total contribution.

HSA Self Plus One & Family under age 55

Annual contribution limit: $9,000 minus the premium pass-through amount = your total contribution.

HSA Self Plus One & Family w/ one spouse age 55

Annual contribution limit: $10,000 minus the premium pass-through amount = your total contribution. Each eligible spouse can contribute $1,000 catch-up, but it must be made to their own HSA.

HSA Self Plus One & Family w/ two spouses age 55+

Annual contribution limit: $11,000 minus the premium pass-through amount = your total contribution. Each eligible spouse can contribute $1,000 catch-up, but it must be made to their own HSA.

IMPORTANT: You must know the eligibility rules for contributing towards an HSA before opening the account and making a contribution. To learn everything that you need to know about HSA eligibility, click here.

For more details on the 2027 HSA contribution changes, see IRS Revenue Procedure 2026-24.