TSP Calculator For Growth And TSP Annuity Calculator At Retirement

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Our TSP Calculators are designed to meet the needs of individuals at two distinct career stages. The TSP growth calculator is for those in the savings stage, and our TSP annuity calculator is for those close to retirement or at retirement age. No matter what stage you are currently at, these tools can help you plan for your future.

Our TSP Annuity Calculator

Use our TSP annuity calculator to see how much contractually guaranteed yearly income you can receive for the rest of your life using your TSP balance. This automates your income during retirement, relieving the stress of worrying about running out of money before you die. Any remaining balance you have will be passed down to your beneficiaries.

To use the calculator simply:

  1. Enter your age.
  2. Input your resident state.
  3. Input your current Thrift Savings Plan balance,
  4. When would you like to collect your TSP payout (Start My Benefits)?

To use the calculator simply:

  1. Enter your age.
  2. Input your resident state.
  3. Input your current 401(a) balance,
  4. When would you like to your payments to begin (Start My Benefits)?
Tsp Retirement Calculator

TSP Growth Calculator

The TSP growth calculator projects your savings potential based on your contributions, rate of return, amount of years until retirement and any employee match benefits you may have. The calculator will show you how much you will have in your TSP account at the time of your retirement.

Tsp Growth Calculator

Withdrawal Options For TSP Savings Plans

Once you are set to retire, you have 5 options on what to do with your TSP account:

  • Partial Distribution: You select how much money you would like to withdraw from your account as a one-time withdrawal. You can continue to withdraw as much as you’d like as long as the payments are at least $1,000 and only once every 30 days.
  • Total Distribution: You remove all of the money from your account in one lump sum. You would owe taxes on the entire balance giving you a large tax bill.
  • Withdrawal Method: You have two options for this method.
    • Option 1: You withdraw a fixed amount each month
    • Option 2: The government computes your withdrawals based on life expectancy tables, your current age, and how much money is in your account. Each year, the amount is recalculated based on new information.
  • Purchase a TSP Annuity: The annuity is thru Metlife. Once purchased, you lose all control of your money in exchange for monthly payments for the rest of your life.
  • Rollover your TSP Account into a Different Retirement Account: We recommend rolling over your money into an IRA Annuity with a Guaranteed Lifetime Withdrawal Benefit.

Limitations of TSP Annuity Options

  • Irrevocability: Once chosen, TSP annuity payments cannot be altered.
  • No Interest Earning: TSP annuities do not earn interest after the purchase.
  • Potentially Lower Rates: TSP annuity rates may be lower than other investment options.

Limitations of Withdrawal Option

  • Not Fully Guaranteed For Life: Because the withdrawals are based on life expectancy tables rather than life expectancy, you may run out of money before you die.

Benefits of Rolling Over TSP into an IRA Annuity With GLWB

  1. Control Over Retirement Savings: Rolling over your TSP into an IRA annuity gives you more control over your retirement funds. Unlike the TSP life annuity, an IRA annuity often provides a wider range of investment options and flexibility in managing those investments.
  2. Earning Interest: Depending on the type of annuity and the investments chosen, An IRA annuity can potentially earn more interest than a TSP account. This can lead to increased retirement savings over time.
  3. Joint life payout Options: IRA annuities typically offer joint life payout options, allowing retirees to provide for their spouses. If you pass away, your spouse can continue receiving benefits, which may not be as flexible in a TSP annuity.
  4. Inflation Adjustment Option: Some IRA annuities offer inflation adjustment options. This feature helps to protect your retirement income from the eroding effects of inflation, a crucial aspect often lacking in traditional TSP annuities.
  5. Lump Sum Death Benefit: In case of the annuitant’s death, IRA annuities often provide a lump sum death benefit to the beneficiaries. This is not always the case with TSP life annuities, where benefits may cease upon death.
    • Note: There are no tax penalties to roll a Thrift Savings Plan into an IRA annuity.

Comparison Of GLWB Annuity and TSP Withdrawals

FeaturesGLWB AnnuityTSP
Withdrawal Percentage5.20% – 6.55%4%
Can Income Increase?YesYes
Can Income Decrease?NoYes
How Long Will Money Last?Lifetime30 Years+
Annual Fees0 – 1.50%1% – 4%
TaxationTaxable/Tax-FreeTaxable/Tax-Free
Death BenefitAccount BalanceAccount Balance

Example: A 60-year-old retiree starts distributions immediately from their $1 million portfolio; they would receive:

  • Annuity With Guaranteed Lifetime Withdrawal Benefit: Between $52,000 and $61,000
  • Thrift Savings Plan: $40,000
Tsp Calculator

What We Recommend

Our TSP calculators work in tandem from the beginning of your career, saving for retirement up until you are ready to retire. The first calculator is ideal for those focusing on the growth and accumulation phase, helping you visualize the potential growth of your savings over time. The second calculator, utilizing annuities, is tailored for individuals nearing retirement, providing a clear view of how your savings can be distributed as steady income during your retirement years. Together, these tools offer comprehensive support whether you’re in the growth phase of your savings or preparing to retire.

Contact us today for a free quote.

Tsp Annuity Calculator

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Questions From Our Readers

How can you determine if a Thrift Savings Plan (TSP) is qualified or non-qualified?

All Thrift Savings Plans (TSPs) are considered qualified plans.

Can I immediately withdraw my TSP after retirement?

You can initiate a withdrawal from your Thrift Savings Plan (TSP) as soon as you retire. However, the processing time and specifics depend on your retirement plan’s rules and the type of withdrawal you choose.

When must I withdraw from my TSP?

The Required Minimum Distribution for TSP retirement accounts is 73.

Does a TSP withdrawal affect social security?

Withdrawals from a TSP are considered part of your retirement income but do not influence the calculation of Social Security benefits.

What happens to my TSP when I retire?

You can keep it in your TSP account and continue to accrue earnings. You can cash out using the annuity option administered by the TSP. Lastly, you can roll it into an IRA fixed indexed annuity with a GLWB. The last choice is our preferred option for most people.

Can I take all of my money from my TSP when I retire?

Yes, you can withdraw from your TSP; however, you will face significant tax burdens as you will pay taxes on the entire withdrawal. Rolling it into a fixed indexed annuity will offset those tax concerns.

When can I withdraw money from my TSP without penalty?

TSP allows penalty-free withdrawals after reaching 59.5. Keep in mind any withdrawal is still subject to federal and state income tax.

Is my money from the TSP tax-free?

If it was funded from a traditional TSP then anything withdrawn is subject to tax. Withdrawals from a Roth TSP are tax-free after 59.5; however, to qualify, you must have held the account for a minimum of five years.

Will my TSP continue to grow after I retire?

Yes. It can continue to grow. However, it is important to note that a TSP is tied directly to the market, so while it can grow, it can also decline. Thus, there is some risk of a market downturn.

What should I do with my TSP? I am 66 and newly retired.

We recommend rolling it into an IRA fixed-indexed annuity with guaranteed lifetime withdrawal benefits. This annuity protects you from potential market loss, but it is still tied to the market, so it offers you the opportunity for growth. Also, the money is contractually guaranteed for life, so you will never have to worry about how long your TSP will last. Finally, if you have money left over after death, a lump sum death benefit will be provided to your beneficiaries.

Can I limit my tax burden on a TSP withdrawal? It is funded pre-tax.

Any withdrawal is still subject to income tax. One solution is to roll it over into a fixed-indexed annuity with a premium bonus. Suppose you roll over $200,000, and a bonus is offering 10%, which is an extra $20,000 that can be used to offset some of the tax liabilities you will face.

Is a thrift savings plan the same as a pension plan?

A thrift savings plan is a government-sponsored retirement plan offered to government employees. A pension plan is typically employer-sponsored and in the private sector. They both offer annuities as a retirement option. These annuities provide guaranteed income for life, but when you annuitize them, you lose control over your principal amount.

Can I take a loan out on my TSP?

Yes. You can take out a loan on your TSP account and repay with interest.

What are the contribution limits to my TSP?

For 2024, the maximum contribution limit is $23,000. If you are over 50 you can contribute an additional catch-up contribution of $7,500.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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