TSP and 401(k) at the Same Time: One Limit, Two Accounts

Can I fund the TSP and a 401(k) in one year?

Yes, but the $24,500 employee deferral limit for 2026 belongs to you, not to each plan. Traditional and Roth deferrals to the TSP, any 401(k) and any 403(b) all count together, and neither payroll office sees the other plan. Two exceptions sit outside the shared limit: a governmental 457(b) has its own limit, and TSP tax-exempt contributions from combat-zone pay don't count against the deferral limit, though they do count toward the $72,000 total.

Step 1: your own limit for the year

Gather your last LES or civilian pay stub from each job, plus your birth date. Catch-up eligibility follows the age you reach by December 31, not your birthday month. The IRS limit for 2026 is $24,500 under 50, $32,500 at 50 to 59 or at 64 and older ($8,000 catch-up), and $35,750 at 60 to 63 ($11,250 catch-up instead). The slip here is keeping the 60 to 63 catch-up in the year you turn 64, which puts $3,250 over the limit.

Step 2: three ways to split the deferrals

Once you know your limit, the split between the two plans is the next call. Three splits cover most households, and the table compares them on the same criteria. Option A fills the civilian 401(k) first to capture its full match, then sends the rest to the TSP. Option B funds the 401(k) only up to its match and puts everything else in the TSP, where fund costs are very low. Option C spreads deferrals evenly across both plans all year.

Here's the tax point people skip. Traditional deferrals in any of the three options move tax to your income-draw years; they don't erase it. The saving is real only if your rate is lower when the money comes out, which is less likely once a military pension already fills the brackets. Roth TSP versus traditional gets its own page on this site.

First Premier Bank won't propose any split until the year-to-date deferrals from both pay stubs sit side by side. After that, each job change triggers one new decision, and each decision has a date in the table below.

The three splits

Where the tax actually goes

Step 3: questions for HR, payroll and the TSP

Three phone calls settle most of the surprises, and each has an answer that should worry you.

Write the answers down next to your pay stubs; you'll want them in December.

What to ask

• True-up: ask civilian HR whether the 401(k) true-ups the match if you hit the limit early; a no means front-loading gives up match dollars for the rest of the year.
• Roth catch-up: ask whether your prior-year FICA wages from that employer were over $150,000, because then your catch-up must go in as Roth.
• Payroll stop: ask whether their system stops you at the limit; a yes is the worrying answer, since it counts only its own plan and can't catch an overfill that comes from the TSP side.
• Refund request: ask the TSP, or your service's finance office if you drill, how to request a refund of excess deferrals and by what date; write that date on your calendar.

Step 4: Tomasz's two airport jobs, worked out

Hypothetical: Tomasz, 64, is a retired Air Force master sergeant working 2 part-time airport operations jobs this year. One pays $40K a year at a base airfield under FERS with the TSP. The other pays $30K a year at a private ground-handling firm with a 401(k) and a 3% match. His wife Marta, 66, has school retirement accounts, but those don't touch his limit, because the deferral limit is per person.

He reaches 64 by December 31, so the $11,250 tier no longer applies and the regular $8,000 catch-up takes over. His room is $24,500 + $8,000 = $32,500 across both plans. He elects $18,000 to the TSP and $14,500 to the 401(k): $18,000 + $14,500 = $32,500. You can plug your own figures into the calculator on this site.

Employer money sits outside the $32,500. The TSP side adds 5% × $40K = $2,000 in agency and matching contributions, and the 401(k) match adds 3% × $30K = $900. Each employer's $72,000 total limit is tested separately, and both totals stay far below it.

Now the tax effect, stated honestly. At an assumed 22% rate, deferring $32,500 lowers this year's tax cost by $32,500 × 22% = $7,150. That tax comes due later, as income draws stacked on his pension and Social Security, so most of it is shifted rather than saved. The lower income this year also feeds a later Medicare premium test; those IRMAA details belong on the TRICARE For Life page.

Tomasz's elections

What the employers add

Step 5: the January W-2 check

In late January, add the Box 12 deferral amounts from both W-2s and compare the sum with your limit. If you're over, tell one plan right away, by the date that plan sets (often March 1), so the excess and its earnings can be paid out by April 15. The last 2 rows of the table are the ones that decide whether an excess is taxed once or twice.

Two small slips tend to come together. Applying the 60 to 63 catch-up after turning 64 sets elections at $24,500 + $11,250 = $35,750, which is $3,250 over the limit. If the fix waits past April 15, that $3,250 is taxed once in the deferral year and a second time at withdrawal. At an assumed 22% rate that's $715 twice, or $1,430 of tax cost on $3,250 of savings.

Two reservists, two different splits

Hypothetical reservist A is 34, single, with a $65K civilian salary, a 4% 401(k) match and about $6K a year of drill pay. Her drill pay can only hold a small TSP deferral. She takes the full 401(k) match first and puts what her drill pay allows into the Roth TSP, because her rate today is likely lower than it will be once her reserve retired pay starts.

Hypothetical reservist B is 52, married, with $150K-plus civilian wages. His 401(k) catch-up must go in as Roth, since his prior-year FICA wages from that employer topped $150,000. Traditional deferrals are worth more at his bracket, so he fills the 401(k) traditional up to $24,500 and keeps TSP deferrals to what his drill pay needs for the BRS match.

The answer shifts with the situation. Filing married usually means wider brackets, which tilts toward Roth. Fund costs matter more on bigger balances, since 0.4% on $300K is $1,200 a year. Someone retiring later, with the pension close, has fewer low-tax years ahead, which also tilts toward Roth. And if a job offers a governmental 457(b) instead of a 401(k), it has its own limit; for drilling reservists, drill pay is often too small to hold much TSP deferral, so the civilian plan usually decides the split. Tax effects of the pension itself are covered in our article on what the 1099-R shows.

Reservist A and B

How the answer shifts

Do I need First Premier Bank for this?

You can add up the limit, pick a split and check your W-2s on your own with the calendar on this page. A conversation with First Premier Bank is worth having when the Roth or traditional choice interacts with a pension, Social Security timing or Medicare premiums. The fee is discussed openly in that first talk and confirmed in writing before any work starts.