Not affiliated with The United States Office of Personnel Management or any government agency

Not affiliated with The United States Office of Personnel Management or any government agency

How Much Should You Have in Your TSP at Retirement? by Flavio “Joe” Carreno

Retirees typically use their TSP accounts to supplement Social Security and FERS annuities. With FERS and Social Security, you’ll be sure to cover 50% to 70% of your pre-retirement income.

 

Financial planners would tell you that you can retire and maintain the same standard of living you had pre-retirement with just 80% of the income you use to earn. If you have started saving to a TSP from your first day at work, it wouldn’t be difficult to accumulate enough funds to make it to that 80% level. It’s not unusual to find federal employees with six figures or even more than a million dollars in their retirement accounts.

 

For instance, if you have a balance of $500,000 and adopt the recommended 4% withdrawal strategy, you can safely withdraw $20,000 yearly for the rest of your life while covering for inflation. If it’s $1,000,000, then you can withdraw $40,000 annually.

When you retire, you do a 180-degree turn from saving to your TSP to withdrawing from it. To plan for this:

 

  1. Make time and visit the TSP website https://www.tsp.gov.
  2. Find their calculator and use it to compute how much your savings will grow.
  3. Calculate how much you may have in your TSP account by the time you start withdrawing the money.

 

Once you have gotten an estimate of your future balance, use the TSP installment payment calculator or the TSP payment and annuity calculator to estimate the amount of monthly income you can realize from that balance in retirement.

 

For TSP participants who have fewer years of federal employment, the Thrift Savings Plan allows you to roll over money from your former employer’s plan and individual retirement arrangements. So you can move your retirement savings from previous jobs to your TSP account.

 

For those who have saved enough for retirement and are in their forties, the TSP calculators will help you determine how much you need to save and for how long you need to save to retire comfortably. You should consider working a bit longer and cut back on expenses to boost your retirement savings.

For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.

We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.

Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure: Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claims‐paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.

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