December 24, 2025
As the calendar turns, federal employees face a different kind of New Year when it comes to their retirement savings. On the Fed Gov Today podcast, Jim Kaplan, Director of External Affairs at the Federal Retirement Thrift Investment Board, explains why the Thrift Savings Plan operates on its own year-end rhythm—and what participants should be thinking about now as they prepare for 2026.
Kaplan notes that while most people celebrate the New Year on December 31, the TSP effectively marks two New Years. December brings a series of important deadlines, many of which have already passed by the time participants reach the final days of the year. Most account transactions and required minimum distributions must be initiated earlier in December. Kaplan explains that the TSP has already processed required minimum distributions for participants who reached that threshold, ensuring no one misses a mandatory payout.
One key date stands out: December 29 at noon Eastern time. That is the cutoff for final withdrawals that participants want counted toward their current tax year. Any withdrawal submitted after that point is processed and deposited in the new year and therefore applies to 2026 taxes. By the end of December, Kaplan says, most participants have wrapped up their 2025 withdrawals and are already shifting their focus to planning for the year ahead.
Before moving forward, Kaplan encourages participants to take care of basic account housekeeping. He recommends logging into your TSP account to confirm that contact information—email, phone number, and mailing address—is accurate. This is also the right time to review beneficiary designations, especially if there have been changes during the year such as marriage, divorce, or the birth of a child. These routine checks help ensure accounts reflect current life circumstances and long-term goals.
As the new year begins, Kaplan points to opportunities to strengthen retirement savings. Pay raises, step increases, and adjustments tied to performance reviews can make it easier to increase contribution levels without significantly affecting take-home pay. He explains that directing a portion of a raise into the TSP allows participants to save more while still seeing their paycheck grow, making it a practical way to plan for retirement with greater confidence.
A major topic of discussion is the upcoming Roth in-plan conversion feature, which launches January 28. Kaplan says participants should start thinking now about whether converting a portion of their traditional TSP balance to Roth makes sense for them. The TSP website already includes information about this change, and once the feature goes live, participants will have access to a personalized calculator inside their account. The tool allows users to factor in income, tax rates, savings levels, and the amount they are considering converting to estimate how long it may take for the tax benefits to outweigh the upfront cost.
Kaplan emphasizes that Roth options are not just for younger employees. While tax-free growth can be powerful early in a career, Roth conversions are increasingly used as part of estate planning. Paying taxes upfront can reduce the burden on heirs and provide more flexibility for beneficiaries.
Finally, Kaplan addresses risk management at the TSP, including cybersecurity and artificial intelligence. He explains that dedicated teams continuously monitor these risks, with formal reviews conducted quarterly and reported to the TSP board. The goal, he says, is to protect participant funds, data, and trust while responsibly adopting new technologies.