Average TSP Account Up about $20,000 in 2025; Roth Conversion Option Launching

Of the $1.07 trillion investment total, $91 billion is in Roth status; just under 3 million of the program’s 7.3 million account holders have some money in that status. Image: Pixels Hunter/Shutterstock.com
By: FEDweek Staff

The average balance for a TSP account holder under the FERS retirement system rose over 2025 from about $194,000 to $217,300, while for an account holder under the CSRS system—almost all of them retirees—grew from $220,000 to $240,700.

A presentation at the January meeting of the TSP governing board added that detail to figures the TSP previously released showing that total assets ended the year at $1.07 trillion, up from $963 billion at year-end 2024.

The presentation meanwhile highlighted information, a tutorial and a calculator being posted at tsp.gov on the Wednesday (January 28) launch of the option to convert investments in traditional status (pre-tax on investment, investments and their earnings taxable on withdrawal) to Roth status (after-tax on investment, investments tax-free on withdrawal as are their earnings if certain conditions are met).

While various restrictions will apply and conversions will be taxable for the year of conversion, it says, benefits would include: “pay taxes now to reduce uncertainty of future tax rates; Roth assets are exempt from Required Minimum Distributions (RMDs); and beneficiaries may inherit tax-free assets (IRS rules apply).”

Of the $1.07 trillion investment total, $91 billion is in Roth status; just under 3 million of the program’s 7.3 million account holders have some money in that status.

Officials also noted that a provision of a 2022 tax law is now in effect, requiring that “catch-up contribution” investments—above the standard investment limit ($24,500 in 2026) for those age 50 during a year—must be made in Roth status for those with 2025 earnings above $150,000.

Year-end 2025 data presented at the meeting further showed that:

* The trend toward a net cash outflow that began the previous year accelerated. While during 2024 there was a net outflow of $1 billion as withdrawals and new loans outpaced new investments and loan repayments, in 2025 the net difference was $19 billion.

* The percentage of investors who have some investment in one or more of the lifecycle L funds rose from 55 to 56, while the percentage who have all of their accounts in one or more rose from 39 to 41.

* The L 2030 and 2040 funds are the largest in terms and amount on investment, both above $64 billion, while the 2050 fund is the largest in number of account holders, about 1.7 million.

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