Important Financial Planning for Postal Workers

(This article appeared in the March/April 2026 issue of The American Postal Worker magazine)

Career employees at the Postal Service have access to federal retirement benefits, but many times they often fail to maximize one of our most valuable perks: “free” money through employer-matching contributions.

The TSP component requires immediate attention from new employees or anyone who has not yet examined their account. The Postal Service automatically contributes 1% of an employee’s basic pay into your TSP account regardless of whether the worker contributes anything. Additionally, the Postal Service matches employee contributions of up to 5% of your salary. Every employee who is in FERS gets an automatic 1% match for their contribution. The Postal Service then matches your contribution dollar-for-dollar for the next 3% that an employee contributes. Finally, for the next 2%, the agency matches 50 cents on the dollar. So, a postal employee who contributes 5% of their salary receives an additional 5% in matching contributions, effectively doubling their retirement savings to 10% of pay.

The 2026 TSP contribution limit is $24,500 for workers under the age of 50. Employees 50 and older can contribute an additional $8,000 in catch-up contributions, bringing their total to $32,500. Workers aged 60-63 can contribute even more through a new “super catch-up” provision allowing total contributions of $35,750.

Starting in 2026, TSP participants earning over $145,000 must make catch-up and super catch-up contributions to Roth accounts, where contributions are made with after-tax dollars but withdrawals in retirement are tax-free. The change also allows in-plan Roth conversions for the  rst time, letting workers convert traditional TSP savings to Roth accounts while still employed. TSP offers six core investment options ranging from conservative government securities in the G Fund to stock market index funds tracking the S&P 500 and international markets. The plan also offers lifecycle funds that automatically adjust asset allocation as workers approach retirement, including a newly added L 2075 Fund for younger employees. It is important that you look at your investment options and make a choice that is right for you. For example, many young workers leave their entire balance in the ultra-conservative G Fund for decades, missing potential growth from stock market investments.

Under FERS, postal workers also receive a pension calculated at 1% to 1.1% of their highest three consecutive years of salary multiplied by years of service. Combined with Social Security bene ts and the TSP, the three-part system is designed to provide comprehensive retirement security for employees.

Postal employees are also covered under the Postal Service Health Benefits program starting in 2025, replacing the previous Federal Employees Health Benefits coverage.

The TSP website at tsp.gov and the Office of Personnel Management, found at opm.gov provide detailed information on federal retirement benefits.

It is wise to enroll in TSP immediately, contribute at least 5% to capture full matching, and increase your contributions with each pay raise to build long-term retirement security. ■