How the projection works
Each month the balance grows by one twelfth of the yearly return, and one twelfth of the yearly contribution is added. At the end of each year the contribution rises by the percent you set for pay raises and promotions. The chart shows the balance against the amount you paid in, so the gap between the two lines is growth.
What to enter for contributions
Use the yearly total from every source:
- Your own contributions, traditional and Roth together.
- The automatic 1% of basic pay the government adds under the Blended Retirement System.
- The match, up to another 4% of basic pay once you have two years of service and contribute at least 5%.
To work out the percent that reaches the annual limit, use the TSP contribution calculator.
What the projection leaves out
Returns do not arrive evenly. A real account will be ahead of this line in some years and well behind it in others. The projection also ignores taxes on traditional withdrawals, and it assumes you never take a loan or a withdrawal. Treat the result as a way to compare choices, such as 5% against 10%, not as a promise.
Questions
How much will my TSP be worth when I retire?
It depends on four things: what you have now, what goes in each year, how long it stays invested and the return. At a 7% yearly return, $5,000 a year from age 25 to 60 grows to roughly $750,000 if the contribution never rises, and to more if it rises with your pay. Change the return to see how much the answer moves.
What rate of return should I use?
There is no right number. The C Fund follows the S&P 500, which has returned about 10% a year over long periods before inflation, with deep losses in some years. The G Fund pays a few percent and cannot lose value. Many planners use 5% to 7% for a mixed portfolio. Try a low figure and a high one and plan around the low one.
Does the calculator include the BRS match?
Enter the total going in each year, yours plus the government’s. The link under that field fills in 5% of your basic pay plus the full Blended Retirement System match, which is another 5% once you have two years of service.
Are the results in today's dollars?
No. The balance is in future dollars and is not reduced for inflation or for tax. To see it in today’s buying power, lower the return by the inflation rate you expect, for example 7% to 4.5%.