Recent federal retirement changes fall into four buckets: Congress repealed the Windfall Elimination Provision and Government Pension Offset that cut Social Security checks for many federal retirees; SECURE Act 2.0 raised the required minimum distribution age to 73 and added a higher catch-up contribution for ages 60 through 63; a new rule taking effect January 1, 2026 forces higher earners to make catch-up contributions on a Roth basis; and the 2026 cost-of-living adjustment came in at 2.8% for CSRS annuitants and 2.0% for FERS annuitants. The Thrift Savings Plan also opened a mutual fund window and moved to a modernized online platform. Here is what each change means and what to do about it.
WEP and GPO Repeal Restored Social Security for Many Federal Retirees
The Social Security Fairness Act, signed into law on January 4, 2025, eliminated the two provisions that had cut Social Security payments for federal retirees for decades.1Congress.gov. H.R.82 – 118th Congress (2023-2024): Social Security Fairness Act of 2023 The Windfall Elimination Provision had modified the Social Security benefit formula for people who also received a pension from work not covered by Social Security, primarily hitting CSRS retirees who had earned enough private-sector credits to qualify for a Social Security benefit. The Government Pension Offset had reduced spousal and survivor benefits by two-thirds of the government pension, often wiping them out entirely.
Under the new law, December 2023 is the last month either provision applies. Benefits payable from January 2024 forward are calculated without any WEP or GPO reduction.2Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) The Social Security Administration began adjusting monthly payments on February 25, 2025, and most affected beneficiaries were receiving the higher amount by April 2025.
Anyone whose payments were underpaid between January 2024 and their processing date also receives a one-time retroactive lump sum, deposited into the bank account SSA has on file. Some retirees whose spousal benefits had been zeroed out by the GPO are now receiving a Social Security check for the first time. If you had benefits reduced under either rule, verify your updated amount through your my Social Security account.
SECURE 2.0 Pushed RMD Age to 73, Rising to 75 in 2033
The SECURE 2.0 Act of 2022 moved the age at which you must begin required minimum distributions from your TSP account and traditional IRAs. Before 2023, mandatory withdrawals started at 72. That age moved to 73 in 2023, and it will move again to 75 starting in 2033. The extra years give retirement accounts more time to grow tax-deferred.
Missing an RMD, or taking less than the required amount, triggers a 25% excise tax on the shortfall.3Office of the Law Revision Counsel. 26 U.S.C. 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans The penalty drops to 10% if you fix the shortfall and file an amended return within a two-year window. The TSP does not automatically send you your RMD, so once you reach the applicable age you have to track the deadline yourself.
Enhanced Catch-Up Contributions at Ages 60 Through 63
SECURE 2.0 also created a higher catch-up contribution for anyone turning 60, 61, 62, or 63 during the calendar year. For 2026, the enhanced catch-up limit for the TSP and similar plans is $11,250, compared with the standard $8,000 catch-up available to everyone age 50 and older.4Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs Combined with the regular 2026 elective deferral limit of $24,500, a federal employee in that age window can put up to $35,750 into the TSP in a single year.5Thrift Savings Plan. Contribution Limits
The enhanced amount stops applying the year you turn 64. If you are in this narrow age band and can afford to contribute more, the window is worth using while it lasts.
Mandatory Roth Catch-Up for Higher Earners Starting January 1, 2026
Beginning January 1, 2026, employees whose FICA-taxable wages were above $150,000 in the prior calendar year must make all catch-up contributions on a Roth (after-tax) basis. You lose the option to direct catch-up dollars into a traditional pre-tax TSP account if you earned above that threshold the year before.
A few details matter. The test uses a one-year lookback based on your prior W-2, not your current-year pay. If your plan does not offer a Roth option, you lose the ability to make catch-up contributions at all. Employees whose prior-year FICA wages were $150,000 or less are unaffected and can continue directing catch-ups to either traditional or Roth. Federal employees who cross the threshold for the first time should confirm their TSP election reflects Roth before contributing catch-up amounts in 2026.
2026 TSP Contribution Limits at a Glance
Pulling the 2026 numbers together:5Thrift Savings Plan. Contribution Limits
- Standard elective deferral (all ages): $24,500
- Age 50+ catch-up: $8,000, for a combined $32,500
- Age 60–63 enhanced catch-up: $11,250, for a combined $35,750
Employees over the $150,000 prior-year FICA wage threshold must make the catch-up portion Roth.
The 2026 COLA: 2.8% for CSRS, 2.0% for FERS
Annual cost-of-living adjustments are tied to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CSRS retirees receive the full CPI-W increase each year, rounded to the nearest tenth of a percent.6Office of the Law Revision Counsel. 5 U.S. Code 8340 – Cost-of-Living Adjustment of Annuities FERS retirees get a tiered version that federal employees call the “diet COLA.”
The FERS tiers work like this. When CPI-W rises by 2% or less, FERS retirees get the full increase. When it rises between 2% and 3%, the adjustment is capped at 2%. When inflation exceeds 3%, FERS retirees receive CPI-W minus one percentage point.7Office of the Law Revision Counsel. 5 U.S. Code 8462 – Cost-of-Living Adjustments For January 2026, CPI-W rose 2.8%, which put the increase in the middle tier for FERS. CSRS annuitants received 2.8%; FERS annuitants were capped at 2.0%.
Two timing details are worth knowing. CSRS retirees receive their first COLA in their first December on the annuity rolls, prorated for partial years. FERS retirees generally must wait until age 62 for any COLA to apply to their basic annuity, with exceptions for disability retirees and those under special provisions for law enforcement officers and firefighters.8U.S. Office of Personnel Management. Learn More About Cost-of-Living Adjustments (COLA) These COLAs apply to the basic annuity only, not to Social Security or TSP withdrawals, which follow their own rules.
TSP Platform and Mutual Fund Window
The TSP’s transition to a new recordkeeping system brought a redesigned online interface with multi-factor authentication and digital document processing. Beneficiary designations, withdrawal requests, and loan applications now run through electronic workflows. Legacy system access has been discontinued, so anyone who has not set up a current account profile on the TSP website needs to do so to manage their holdings.
The mutual fund window lets participants invest a portion of their balance in private mutual funds beyond the standard G, F, C, S, and I funds. To use it, you need a total TSP balance of at least $40,000, and your initial transfer must be $10,000 or more and cannot exceed 25% of your total savings.9Thrift Savings Plan. Mutual Fund Window
The window carries added costs: a $95 annual maintenance fee, a $28.75 per-trade fee, and whatever expense ratios the individual mutual funds charge. There is also a $37 annual administrative fee so non-participating TSP members do not subsidize the service. For most participants the core TSP funds, with their very low expense ratios, will remain the better choice. The window mainly benefits those wanting exposure to strategies the five core funds do not cover.
TSP Loans
The TSP allows two loan types: a general-purpose loan with a 1-to-5-year repayment term, and a primary residence loan with a 1-to-15-year term. The interest rate on both equals the G Fund rate from the month before you request the loan and stays fixed for the life of the loan.10Thrift Savings Plan. TSP Loans
One Boundary to Watch: FEHB Enrollment Before Retirement
None of the changes above affect the five-year rule for carrying Federal Employees Health Benefits coverage into retirement. To keep FEHB after you retire, you must retire on an immediate annuity and have been continuously enrolled in an FEHB plan for the five years of service immediately before retirement, or for all service since your first opportunity to enroll if that is less than five years.11Office of the Law Revision Counsel. 5 U.S.C. 8905 – Election of Coverage Coverage as a family member on someone else’s FEHB plan counts toward the five years.
Missing this window is expensive. Private health insurance for retirees under 65 costs far more than FEHB, and there is no retroactive enrollment. If you are within a few years of retirement and not currently enrolled, use the next open season.
What to Do Now
If you had Social Security benefits reduced by WEP or GPO, log into my Social Security and confirm your new monthly amount and any retroactive payment. If you will turn 73 in 2026 or later, put your first RMD deadline on the calendar; the TSP will not do it for you. If you are between 60 and 63 next year, decide whether to use the enhanced catch-up. If your 2025 FICA wages topped $150,000, switch your catch-up election to Roth before your first 2026 contribution. And if FEHB is not already in place five years before your planned retirement date, fix that at the next open season.