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The year winds down fast, and several financial deadlines matter for veterans and service members. Miss them, and you could lose money, face penalties or forfeit tax benefits you’ve earned.
Here are four deadlines to handle before Dec. 31, plus two more that can wait until April if needed.
1. Max Out Your TSP Contributions
Active-duty and federal employee veterans have until Dec. 31 to contribute to their Thrift Savings Plan for 2025. The annual limit is $23,500, with an extra $7,500 catch-up for those 50 and older; or $11,250 for ages 60-63.
This deadline hits differently if you’re under the Blended Retirement System. To get the full 5% government match, you need to contribute at least 5% every month through December. If you max out too early in the year, you lose months of matching contributions.
Check your Leave and Earnings Statement to see where you stand. If you’re behind, try to increase your contribution percentage now through myPay or your service’s payroll system. You won’t get another chance until 2026 starts.
2. Spend or Lose Your FSA Money
Service members enrolled in flexible spending accounts through FSAFEDS must spend their 2025 contributions by Dec. 31. This includes both health care FSAs (up to $3,300) and dependent care FSAs (up to $7,500 for married filing jointly).
The rule is simple: Use it or lose it. You can carry over up to $660 into 2026 if you re-enrolled during open season, but anything above that disappears. You have until April 30, 2026, to file claims for expenses incurred by Dec. 31, 2025, but the expenses themselves need to happen this year.
Health care FSAs cover copays, dental work, vision care, over-the-counter medications and medical equipment. Dependent care FSAs cover child care and adult day care while you work. If you’re sitting on unused FSA money, schedule those appointments or stock up on eligible supplies now.
Read More: How to Spend the Money Left in Your DoD Health FSA by Dec. 31
3. Take Your Required Minimum Distribution
Veterans ages 73 and older must take required minimum distributions from traditional IRAs, TSP accounts, and 401(k)s by Dec. 31. First-time RMDs get a pass until April 1, 2026, but everyone else needs to withdraw by year-end or face a 25% penalty on the amount not taken.
The amount you must withdraw depends on your account balance from Dec. 31, 2024, divided by your life expectancy factor from IRS tables. Most financial institutions will calculate this for you. Do this as soon as possible because request processing takes time, especially when firms get slammed with year-end distributions.
If this is your first RMD and you delay until April 2026, remember: You’ll still need to take your second RMD by Dec. 31, 2026. That means two taxable distributions in one year, which could push you into a higher tax bracket.
4. Complete Roth Conversions
Any Roth IRA conversions must be completed by Dec. 31 to count toward the 2025 tax year. This means moving money from a traditional IRA or TSP to a Roth account, paying taxes now in exchange for tax-free growth later.
The deadline matters because your 2025 tax situation might make this an opportune year for conversion. Maybe you had lower income this year, or you want to fill up a lower tax bracket before rates change. Once 2026 starts, you can’t backdate conversions to 2025.
Deadlines That Can Wait
IRA Contributions
You have until April 15, 2026, to contribute to a traditional or Roth IRA for 2025. The limit is $7,000; or $8,000 if you’re 50 or older.
HSA Contributions
Health Savings Account contributions for 2025 can also wait until April 15, 2026. The 2025 limits are $4,300 for individuals and $8,550 for families, with an extra $1,000 catch-up if you’re 55 or older.
Don’t Miss the Dec. 31 Deadlines
The Dec. 31 deadlines are hard stops. TSP contributions stop when your paycheck does, FSA money disappears, RMDs trigger penalties, and Roth conversions can’t be backdated. Handle these four items now while you still have time to act.
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22 Comments
The fact that you can stock up on eligible supplies with your FSA money is a good way to use up any remaining balance before December 31.
The $11,250 catch-up contribution for ages 60-63 is a significant amount, and veterans in this age group should take advantage of it to boost their retirement savings.
I’m wondering how the Roth IRA conversions will affect taxes for veterans, especially since any conversions must be completed by December 31 to count toward the 2025 tax year.
I’m concerned about the ‘use it or lose it’ rule for FSA money, especially for service members who may not have had a chance to use their full $3,300 for health care FSAs or $7,500 for dependent care FSAs.
The fact that you can carry over up to $660 into 2026 if you re-enrolled during open season for FSAFEDS is a relief, but it’s still important to use as much of the contributions as possible before December 31.
The life expectancy factor from IRS tables used to calculate the required minimum distribution amount seems complex, and I hope most financial institutions will indeed calculate this for veterans.
I’m excited about the opportunity to move money from a traditional IRA or TSP to a Roth account, and I think it’s a great way to plan for retirement.
I’m skeptical about the processing time for required minimum distributions, especially since financial institutions may be slammed with year-end distributions.
Yes, it’s always a good idea to plan ahead and request the distribution as soon as possible to avoid any delays.
The requirement to take your first RMD by April 1, 2026, if you’re a first-time RMD recipient seems like a good exception to the general rule of taking RMDs by December 31.
The Blended Retirement System’s requirement to contribute at least 5% every month to get the full 5% government match is a good incentive to save consistently throughout the year.
The importance of checking your Leave and Earnings Statement to see where you stand on your TSP contributions cannot be overstated, especially if you’re trying to max out your contributions by December 31.
I’m supportive of the idea of maxing out TSP contributions, especially since it’s a great way to save for retirement and receive the full government match.
The need to increase your contribution percentage now through myPay or your service’s payroll system if you’re behind on your TSP contributions is a good reminder to take action before December 31.
The possibility of being pushed into a higher tax bracket if you delay your first RMD until April 2026 and then take your second RMD by December 31, 2026, is a concern that veterans should be aware of.
I’m wondering if there are any specific resources or tools available to help veterans navigate the process of required minimum distributions and Roth IRA conversions.
The required minimum distribution of 25% penalty on the amount not taken from traditional IRAs, TSP accounts, and 401(k)s by December 31 is a significant penalty, and veterans ages 73 and older should take note.
I’m curious about how the dependent care FSAs cover child care and adult day care while working, and if there are any specific requirements or limitations for these expenses.
According to the article, dependent care FSAs cover expenses for child care and adult day care while you work, but it’s always best to check the specific details of your plan to ensure you’re eligible.
The $23,500 annual limit for Thrift Savings Plan contributions is a significant amount, and the extra $7,500 catch-up for those 50 and older is a great incentive to save more for retirement.
The April 30, 2026, deadline to file claims for expenses incurred by December 31, 2025, seems reasonable, but it’s still important to keep track of your expenses and file claims as soon as possible.
The possibility of losing months of matching contributions if you max out your TSP contributions too early in the year is a concern that veterans should be aware of.