1. What is the TSP Retirement Calculator?

The TSP (Thrift Savings Plan) Retirement Calculator helps federal employees and uniformed service members estimate the future value of their TSP investments based on compound interest.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Initial investment (USD)
• \( r \) — Annual interest rate (unitless)
• \( n \) — Number of years invested

Explanation: The formula calculates how an initial investment grows over time with compound interest, where earnings are reinvested to generate their own earnings.

3. Importance of Retirement Planning

Details: Proper retirement planning ensures financial security in later years. The TSP is a critical component of retirement savings for federal employees, offering tax advantages and matching contributions.

4. Using the Calculator

Tips: Enter your current TSP balance as the initial investment, estimate your average annual return rate (historically 5-7% for TSP), and the number of years until retirement. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical TSP return rate?
A: Historical average returns vary by fund: G Fund ~2-3%, C Fund ~7%, S Fund ~8%, I Fund ~6%. Your actual rate depends on your fund allocation.

Q2: Should I include employer matching?
A: Yes, include all contributions (yours and matching) in your initial investment amount for the most accurate projection.

Q3: How often does TSP compound?
A: TSP accounts compound daily, but this calculator uses annual compounding for simplicity, which provides a good estimate for long-term planning.

Q4: What about ongoing contributions?
A: This calculator shows growth of a single investment. For regular contributions, use a future value calculator that accounts for periodic payments.

Q5: Are TSP withdrawals taxed?
A: Traditional TSP withdrawals are taxed as ordinary income. Roth TSP withdrawals may be tax-free if conditions are met. This calculator doesn't account for taxes.