TSP Growth & Retirement Projection Calculator
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Understanding TSP Growth for Federal Employees
The Thrift Savings Plan (TSP) is a cornerstone of federal retirement. Unlike a simple savings account, TSP growth relies on the power of compounding interest, consistent contributions, and market performance across various funds (G, F, C, S, and I).
How the TSP Growth Calculator Works
This calculator simulates the accumulation phase of your retirement journey. It takes your current balance and adds monthly contributions based on your salary. Crucially, it accounts for the Agency Match, which for most FERS employees is an automatic 1% plus a dollar-for-dollar match on the first 3% and 50 cents on the dollar for the next 2%, totaling up to 5%.
- Compound Frequency: This tool calculates growth based on monthly compounding, which mirrors how payroll deductions and matching funds are typically applied.
- Expected Return: Historic returns vary. The C Fund (S&P 500) has historically averaged around 10%, while the G Fund (Government Securities) offers lower risk with lower returns (often 2-3%).
- Time Horizon: The "Years to Retirement" field is the most powerful variable. Compounding yields the highest results in the final decade of a 20 or 30-year career.
Practical Example: The Power of the 5% Match
Consider a federal employee earning $75,000 annually with a $50,000 starting balance. By contributing 5% ($312.50/month), the Agency matches another 5% ($312.50/month). Totaling $625 per month in new capital.
Over 20 years at a 7% average annual return:
- Starting Balance: $50,000
- Total Personal Contributions: $75,000
- Agency Matching: $75,000
- Ending Balance: Approximately $510,000
In this scenario, nearly 70% of the final balance comes from matching and market growth, rather than the employee's out-of-pocket contributions.
Key Factors Influencing Growth
To maximize your TSP growth, consider the "Lifecycle (L) Funds" if you prefer a hands-off approach. These funds automatically shift from aggressive (C, S, I) to conservative (G, F) as you approach your target retirement date. For those looking for maximum growth, increasing the contribution rate beyond 5%—up to the IRS annual elective deferral limit—is the most effective way to build a multi-million dollar nest egg.