Thrift Savings Plan Annuity Calculator

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TSP Annuity Payment Estimator

Use this calculator to estimate your potential monthly annuity payment from your Thrift Savings Plan (TSP) account. Please note that actual annuity rates vary significantly based on age, gender, current interest rates, and chosen annuity features (e.g., survivor benefits, cash refund, 10-year certain). This calculator provides a simplified estimate based on a user-provided annuity purchase rate.







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Estimated Monthly Annuity Payment:

function calculateTspAnnuity() { var tspBalance = parseFloat(document.getElementById("tspBalance").value); var annuityRate = parseFloat(document.getElementById("annuityRate").value); var ageAtPurchase = parseInt(document.getElementById("ageAtPurchase").value); // Captured but not used in direct calculation var gender = document.getElementById("gender").value; // Captured but not used in direct calculation if (isNaN(tspBalance) || tspBalance < 0) { document.getElementById("result").innerHTML = "Please enter a valid TSP Account Balance."; return; } if (isNaN(annuityRate) || annuityRate < 0) { document.getElementById("result").innerHTML = "Please enter a valid Annuity Purchase Rate."; return; } var monthlyAnnuity = (tspBalance / 1000) * annuityRate; document.getElementById("result").innerHTML = "Based on your inputs, your estimated monthly annuity payment would be: $" + monthlyAnnuity.toFixed(2) + "."; }

Understanding Your TSP Annuity Options

The Thrift Savings Plan (TSP) offers federal employees and uniformed service members a powerful retirement savings vehicle. As you approach retirement, one of the distribution options available for your TSP balance is purchasing an annuity. An annuity converts a portion or all of your TSP savings into a guaranteed stream of income for life, or for a specified period.

How TSP Annuities Work

When you choose to annuitize your TSP balance, you are essentially purchasing a contract from a private insurance company (selected by the TSP board) that promises to pay you a fixed amount of money regularly. The amount of your monthly payment is determined by several factors, including:

  • Your TSP Account Balance: The larger the amount you use to purchase the annuity, the higher your potential payments.
  • Annuity Purchase Rate: This is a crucial factor, representing how much income you receive per $1,000 of your purchase price. This rate is influenced by prevailing interest rates at the time of purchase. Higher interest rates generally lead to higher annuity payments.
  • Your Age at Purchase: Generally, the older you are when you purchase an annuity, the higher your monthly payments will be. This is because the insurance company expects to pay you for a shorter period.
  • Your Gender: Actuarial tables used by insurance companies consider life expectancy, which varies by gender.
  • Annuity Features Chosen: TSP offers several annuity options that impact your payment amount:
    • Single Life Annuity: Payments are made for your lifetime only.
    • Joint Life Annuity: Payments continue for the lifetime of both you and a designated survivor (usually your spouse). This option typically results in lower monthly payments than a single life annuity because payments are expected to last longer.
    • Cash Refund: If you die before receiving payments equal to the amount you paid for the annuity, your beneficiary receives the difference. This also reduces monthly payments.
    • 10-Year Certain: Guarantees payments for at least 10 years, even if you die sooner. If you live longer than 10 years, payments continue for your lifetime. This option also reduces monthly payments.

Why Consider a TSP Annuity?

A TSP annuity can provide a predictable and guaranteed income stream in retirement, offering peace of mind that you won't outlive your savings. It removes the investment risk from your shoulders, as the insurance company takes on the responsibility of providing regular payments.

Limitations of This Calculator

This calculator provides a simplified estimate based on a user-provided annuity purchase rate. It does not account for the complex actuarial calculations that determine the exact rates offered by the TSP's annuity provider, nor does it factor in the specific impact of choosing survivor benefits, cash refund, or 10-year certain options. The "Annuity Purchase Rate (per $1,000)" input is a critical variable that you would typically obtain from the TSP's annuity provider based on your specific circumstances and chosen features. Always consult official TSP resources and financial advisors for personalized advice.

Example Scenario:

Let's say you have a TSP balance of $400,000 and you are 68 years old. Based on current rates and your chosen annuity features (e.g., a single life annuity without cash refund), the TSP's annuity provider might offer an annuity purchase rate of $5.50 per $1,000. Using the calculator:

  • TSP Account Balance: $400,000
  • Annuity Purchase Rate (per $1,000): $5.50
  • Age at Annuity Purchase: 68
  • Gender: Female

Your estimated monthly annuity payment would be: ($400,000 / 1,000) * $5.50 = $2,200.00 per month.

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