TSP Calculator For Growth And TSP Annuity Calculator At Retirement

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

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 five 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: You purchase the annuity through Metlife. However, once the annuity you lose control over your savings and, in return, are provided a monthly payment that earns minimal interest.
  • 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

How We Can Help

You’ve worked hard to save for retirement, and ensuring those savings last is a top priority. The Annuity Expert is here to help you navigate your TSP and make the most of your retirement funds. We understand the complexities and challenges you face, from understanding the best ways to grow your savings to making the right decisions about withdrawals.

Common Challenges:

  • Understanding Investment Options: Choosing the right funds can be overwhelming.
  • Planning Withdrawals: Knowing when and how to withdraw can impact your financial stability.
  • Maximizing Employer Contributions: Not taking full advantage of employer matching can leave money on the table.

Our Expertise: With over 15 years as an insurance agency, annuity broker, and retirement planner, we have the knowledge and experience to help you succeed. We believe in finding the best solutions at the lowest costs, ensuring you get the most value from your TSP.

Tsp Calculator

What We Recommend

Step 1: Initial Consultation

  • What Happens: We’ll start with a comprehensive review of your current TSP, retirement goals, and financial situation.
  • Main Benefit: Gain a clear understanding of where you stand and what steps are needed to achieve your retirement goals.

Step 2: Personalized Plan Development

  • What Happens: Based on your unique needs, we’ll develop a tailored retirement strategy that includes optimal investment choices, withdrawal plans, and tax considerations.
  • Main Benefit: Receive a customized plan designed to maximize your savings and ensure financial security in retirement.

Step 3: Ongoing Support and Adjustments

  • What Happens: We’ll provide continuous support, monitoring your plan and making adjustments as needed to respond to market changes or life events.
  • Main Benefit: Enjoy peace of mind knowing your retirement strategy is being managed by experts committed to your success.

Features and Benefits:

  • Personalized Quotes: Tailored to your individual needs and preferences.
  • Expert Advice: Leverage our extensive knowledge to make informed decisions.
  • Continuous Monitoring: Ensure your plan adapts to changing circumstances.
  • Maximized Savings: Optimize contributions and withdrawals for the best financial outcomes.

Overcoming Objections:

  • Concern: “I don’t understand the investment options.”
    • Response: We simplify the process and provide clear recommendations.
  • Concern: “I’m not sure when to start withdrawals.”
    • Response: We’ll create a detailed withdrawal plan tailored to your needs.
  • Concern: “I want to avoid high fees.”
    • Response: We focus on finding cost-effective solutions that maximize your savings.

Failing to plan effectively for your TSP can lead to missed opportunities and financial insecurity. By working with The Annuity Expert, you can ensure your retirement is as secure and prosperous as possible. You’ll experience the peace of mind that comes from knowing your future is in good hands.

Contact us today for free advice or a quote and take the first step towards a secure and fulfilling retirement.

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.

How much will my TSP grow?

The growth of your Thrift Savings Plan (TSP) depends on your contributions, investment choices, and market performance. Use our TSP Growth calculator above to estimate future value based on your inputs. Contact us for personalized, detailed projections.

Is the Metlife TSP Annuity any good?

No, the Metlife TSP Annuity is generally not considered a good option due to loss of control over savings, potential lack of a death benefit, and minimal interest earnings.

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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