1. What is the TSP Growth Formula?

The TSP (Thrift Savings Plan) Growth Formula calculates the future value of an investment based on compound interest. It helps estimate how your TSP account might grow over time given a fixed annual growth rate.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment)
• \( r \) — Annual growth rate (as a decimal)
• \( n \) — Number of years invested

Explanation: The formula accounts for compound growth, where each year's growth builds on both the original principal and accumulated growth from previous years.

3. Importance of TSP Growth Calculation

Details: Understanding potential growth helps with retirement planning, contribution decisions, and assessing whether your current savings rate will meet future financial needs.

4. Using the Calculator

Tips: Enter your current TSP balance as principal, estimated annual growth rate (typically 5-8% for TSP), and number of years until retirement. All values must be valid (principal > 0, rate ≥ 0, years > 0).

5. Frequently Asked Questions (FAQ)

Q1: What's a realistic growth rate for TSP?
A: Historically, the C fund (S&P 500) averages about 7% annually after inflation, but actual rates vary year to year.

Q2: Does this account for additional contributions?
A: No, this calculates growth on a fixed principal. For recurring contributions, use a future value of annuity formula.

Q3: How often is the growth compounded?
A: The formula assumes annual compounding, which is standard for these types of calculations.

Q4: Should I use nominal or real growth rates?
A: For long-term planning, real (inflation-adjusted) rates are more useful. TSP's historical returns are about 2-3% real for G Fund and 5-7% real for C/S/I Funds.

Q5: How accurate are these projections?
A: They're estimates based on consistent returns. Actual results will vary due to market fluctuations and contribution changes.