Marcus retired from a GS-13 position at an Air Force depot in 2021. He'd circled his 70½ birthday in red for years, because everyone told him that's when the IRS forces you to start pulling money out of your TSP and IRA. Then, over a cookout, his brother-in-law mentioned that the rules had changed. Marcus, born in 1952, wouldn't have to start until 73. That was two and a half extra years of tax-deferred growth he'd nearly missed.

That change came from SECURE 2.0, the retirement package Congress passed in December 2022 as part of a large spending bill. It built on the original SECURE Act of 2019, and its provisions phase in through 2033. Here is what matters for people with a TSP, an IRA, or both.

The big one: required minimum distributions

Required minimum distributions (RMDs) are the annual withdrawals the IRS makes you take from traditional accounts once you reach a certain age. SECURE 2.0 moved that age in two steps.

  • Born 1951 through 1959: RMDs begin at 73.
  • Born 1960 or later: RMDs begin at 75.

If you're a younger FERS employee or a service member still on active duty, 75 is likely your number. Two other changes matter just as much.

First, the penalty for missing an RMD dropped from 50 percent of the amount you should have withdrawn to 25 percent, and to 10 percent if you fix the mistake promptly. Still painful, but no longer ruinous.

Second, Roth balances inside workplace plans no longer carry RMDs, starting in 2024. That put them on par with Roth IRAs, which never had them. For TSP participants with a Roth balance, this makes the Roth side of the plan more attractive for legacy planning. Check tsp.gov for how the TSP applies these rules to your account.

Catch-up contributions get a second act

Anyone 50 or older can contribute extra beyond the normal limit. That's been true for years. SECURE 2.0 adds a higher catch-up for people aged 60 through 63, starting in 2025. The amount is the greater of $10,000 or 150 percent of the regular catch-up, indexed over time.

Picture a 61-year-old FERS employee two years from retirement, with the kids finally out of the house and the mortgage nearly done. That's exactly the person this was designed for. A few extra thousand dollars a year, tax-deferred, in the final stretch before retirement adds up.

A related rule says higher earners (those above an indexed wage threshold, around $145,000 in recent years) must make catch-up contributions as Roth rather than pre-tax. That requirement was delayed and takes effect in 2026. How it plays out for federal plans depends on how the TSP implements it, so don't assume. Dollar limits and thresholds change yearly, so confirm current numbers at irs.gov and tsp.gov.

IRA catch-up contributions, long frozen at $1,000, are now indexed to inflation too.

Help for people who aren't maxing anything

Much of the law targets people who are barely able to save, and this is where it's easy to miss opportunities.

The Saver's Match

Starting in 2027, the old Saver's Credit gets replaced by a federal matching contribution of up to 50 percent on the first $2,000 you save, deposited directly into your retirement account. Eligibility depends on income. A junior enlisted service member or a lower-paid civilian employee may qualify, and a $2,000 contribution could trigger up to $1,000 from the government. Watch irs.gov for details as 2027 approaches.

Emergency access

Two provisions loosen the "I can't save because I can't get it back" worry. Beginning in 2024, you can withdraw up to $1,000 per year for an emergency without the usual 10 percent early-withdrawal penalty. Employers can also offer small emergency savings accounts linked to their plans. Penalty-free exceptions also exist for domestic abuse victims, people with terminal illness, and disaster recovery, with separate limits and paperwork.

Student loans

Employers can now match a worker's student loan payments as if they were retirement contributions. This mostly affects private-sector plans, but it signals where the law is headed. Many younger federal workers carry loans, and they often feel they must pick between paying debt and saving.

Smaller changes worth knowing

A few provisions don't get headlines but can matter in specific situations.

  • 529 to Roth IRA rollovers. After 15 years, leftover money in a 529 education account can move to a Roth IRA for the beneficiary, up to a $35,000 lifetime cap and subject to annual Roth contribution limits. If your child got a scholarship or skipped college, this keeps the money working.
  • Surviving spouses. A surviving spouse who inherits a plan can elect to be treated as the original owner for RMD purposes, which can delay distributions and simplify things.
  • Qualified charitable distributions. The annual limit for giving directly from an IRA to charity is now indexed for inflation. A one-time, larger gift through certain charitable vehicles is also allowed.
  • Annuity-friendly rules. Limits on buying certain longevity annuities with retirement money were loosened. Retirees worried about outliving their savings have more room to use these products.
  • Employer matching in Roth form. Employers may now offer matches as Roth contributions, if their plans allow it.

What doesn't automatically apply to you

Here's the honest caveat. The TSP isn't a standard private-sector 401(k). It's governed by its own statute and run by the Federal Retirement Thrift Investment Board. Some SECURE 2.0 changes apply to it directly through the tax code. Others only reach the TSP once the board adopts them. And a few, like mandatory auto-enrollment for new 401(k) plans, don't apply to governmental plans at all. The TSP already auto-enrolls new FERS and uniformed-service participants anyway.

IRAs are simpler. The tax code governs them directly, so RMD ages, catch-up rules, and the 529 rollover work the way the law reads.

What to do with all this

Start with three quick checks.

  1. Look up your RMD age. Find your birth year in the list above and write down the year your first distribution is due. Don't rely on a figure someone told you at a cookout, or one from before 2023.
  2. If you're 59 or older, price out a larger contribution. Even a modest bump during the age 60 to 63 window can matter more than people expect. Confirm what your plan permits.
  3. Revisit Roth versus traditional. With RMDs gone from workplace Roth balances and the Roth catch-up rule coming, the tax picture has shifted. A fee-only planner or a tax professional can run your numbers.

Marcus, for his part, used his extra years to do partial Roth conversions in low-income years before his RMDs started. It wasn't a magic trick, just a smart use of a longer runway. That's the real story of SECURE 2.0. Most of it isn't dramatic. It hands people more time, more flexibility, and fewer traps, if they know it's there.