TSP Rate of Return Calculator
Calculate your Personal Investment Performance (PIP) and Annualized Returns.
*Calculations use the Modified Dietz approximation method to account for cash flows (contributions) occurring during the period.
Understanding Your TSP Rate of Return
The Thrift Savings Plan (TSP) is a defined contribution plan for United States civil service employees and retirees, as well as for members of the uniformed services. Tracking the performance of your retirement portfolio is crucial for long-term financial planning. Unlike a simple savings account, calculating the rate of return on your TSP involves accounting for market fluctuations and the timing of your bi-weekly contributions.
How This Calculator Works
This calculator estimates your investment performance by comparing your starting balance, ending balance, and the net cash flows (contributions) added during the period. It provides three key metrics:
- Net Investment Gain: The actual dollar amount your portfolio grew due to market performance, excluding the money you deposited.
- Total Simple Return: The percentage growth over the selected timeframe, adjusted for your contributions.
- Annualized Rate of Return (CAGR): The geometric progression ratio that provides a constant rate of return over the time period. This is useful for comparing your TSP performance against annual benchmarks like the S&P 500 (C Fund) or the EAFE Index (I Fund).
The Math Behind TSP Returns
Calculating returns when you are actively contributing (via payroll deduction and agency matching) is more complex than a static investment. This calculator uses a variation of the Modified Dietz Method to estimate your return. The logic assumes that, on average, your contributions were invested for half of the time period.
The formula for the gain is straightforward:
Gain = Ending Balance – Starting Balance – Total Contributions
However, to find the rate, we divide the gain by the weighted average capital:
Rate = Gain / (Starting Balance + (Total Contributions / 2))
TSP Fund Benchmarks
To understand if your calculated rate of return is "good," compare it against the historical averages of the individual TSP funds:
- G Fund: Government Securities. Lowest risk, historically returns 2-3% (matches inflation).
- F Fund: Fixed Income Index. Low to moderate risk, tracks bond market.
- C Fund: Common Stock Index. Tracks the S&P 500. historically higher volatility but higher long-term returns (avg ~10%).
- S Fund: Small Cap Stock Index. Tracks the Dow Jones U.S. Completion TSM Index. High volatility.
- I Fund: International Stock Index. Tracks non-U.S. markets.
If your annualized return is significantly lower than the funds you are invested in, consider reviewing your interfund transfers or contribution allocations.
Improving Your TSP Performance
Your rate of return is heavily influenced by your asset allocation. Younger employees often benefit from the higher growth potential of the C, S, and I funds (or the appropriate L Fund), while those closer to retirement might prioritize capital preservation in the G and F funds. Regularly reviewing your "Personal Investment Performance" (PIP) on the official TSP website and using tools like this calculator can help ensure your retirement goals remain on track.