For members of the uniformed services and federal employees alike, the Thrift Savings Plan (TSP) continues to serve as a powerful foundation for long-term retirement savings and financial security, but beyond simply enrolling and contributing, success with the TSP also requires strategic planning, especially as annual contribution limits increase.

One commonly discussed figure “23,500/26” may seem cryptic at first, but it represents a crucial planning concept that can help participants get the most from their TSP, especially in 2026.

This blog will help you understand what the 23,500/26 strategy means, how to apply it effectively, and why thoughtful contribution planning matters more than ever.

The term “23,500/26” represents the projected 2026 elective deferral limit for TSP participants $23,500 divided evenly across 26 biweekly federal pay periods.

$23,500 ÷ 26 = $903.85

This number approximately $903.85 is the per-paycheck amount you would need to contribute throughout the year to evenly reach the annual maximum without overfunding early or missing any matching opportunities.

While seemingly simple, this calculation can help ensure that contributions remain consistent and maximize your agency match, while also avoiding the common mistake of stopping early due to hitting the cap too soon.

Reaching the annual TSP contribution limit is a great goal. But how and when you contribute is just as important as how much you contribute.

Many employees make the mistake of “front-loading” their TSP, contributing aggressively in the first few months of the year. While this accelerates personal savings, it can unintentionally stop agency matching contributions once the limit is reached. For those under FERS, this could mean losing:

• The 1% automatic agency contribution
• Up to 4% in matching contributions tied to elective deferrals

By using the 23,500/26 strategy and spreading contributions evenly over the year, you help preserve these valuable employer matches and ensure your account receives consistent deposits throughout all 26 pay periods.

If your goal is to contribute the full $23,500 in 2026 and you receive a biweekly paycheck, set your contribution at $903.85 per pay period. To account for any gaps due to unpaid leave or payroll adjustments, you may consider rounding up slightly, perhaps to $905.

This predictable contribution method ensures that both personal savings and agency contributions remain on track.

If you turn 50 or older in 2026, you could qualify to make additional catch-up contributions. For 2025, this limit is $7,500 and may be adjusted slightly for 2026. If unchanged, eligible participants could contribute up to:

$23,500 + $7,500 = $31,000

To distribute $31,000 evenly across 26 pay periods, the ideal contribution would be about $1,192 per paycheck. This added opportunity can make a major impact for those approaching retirement age and looking to maximize their tax-advantaged savings.

Consistency in contributions doesn’t just help you reach your goal, it also ensures your TSP is receiving the maximum available agency match year-round.

When you front-load, you may stop receiving matching funds once your limit is reached. On the other hand, by pacing contributions using the 23,500/26 strategy, you avoid unexpected pauses and ensure long-term compounding remains uninterrupted.

Another important part of your savings strategy is deciding between TSP traditional and Roth contributions. With the TSP traditional vs Roth debate, the right answer depends on your tax situation, income expectations, and retirement goals.

• Traditional TSP: Contributions are made with pre-tax dollars, lowering your taxable income today. Distributions taken during retirement are subject to taxation as ordinary income.
• Roth TSP: Contributions are made with after-tax dollars, offering no immediate tax benefit, but qualified withdrawals in retirement are completely tax-free.

Some federal employees prefer to split contributions between both options to diversify their tax exposure in retirement. Either way, understanding your current and future tax positioning is essential when making this decision.

Each year, the IRS sets limits on how much can be contributed to TSP accounts. The TSP contribution cap is expected to increase from $23,000 in 2025 to $23,500 in 2026. This cap applies to elective deferrals and does not include agency contributions or catch-up contributions.

Make sure to review your payroll elections at least once a year, especially in response to updates from the IRS. A small increase in the limit, like the one projected for 2026, may require you to adjust your per-paycheck amount to stay on track.

Contribution changes are generally submitted through your agency’s payroll platform, such as MyPay, Employee Express, or EBIS. You can choose to:

• Set a specific dollar amount per pay period
• Contribute a fixed percentage of your salary

For those looking to precisely hit the $23,500 or $31,000 goals, a flat dollar amount per paycheck is usually the most efficient and accurate method.

The 23,500/26 contribution strategy offers a straightforward yet effective approach to meeting your TSP goals in 2026. By dividing the projected annual contribution limit of $23,500 evenly across 26 biweekly pay periods, you ensure steady savings, maintain eligibility for full agency matching, and avoid the costly mistake of front-loading your contributions too early in the year. For those age 50 or older, adding catch-up contributions potentially boosting your total to $31,000 can provide a powerful advantage in the final stretch of your career, allowing for more tax-advantaged growth.

Just as important is the decision between traditional and Roth TSP contributions. Choosing the right balance between pre-tax and after-tax contributions can directly impact your long-term tax liability and retirement income. Even a slight shift in how you contribute could make a substantial difference in how much you keep during retirement. These decisions though they may seem minor, accumulate over time and can significantly influence your financial security.

If you’re not sure whether your current contribution plan is aligned with your goals, or if you’re questioning your traditional vs. Roth allocation, PWR Retirement Group is here to help. Our specialists provide guidance tailored to federal employees, so you can retire with confidence.