TSP calculator


Q. I’ve been doing some estimates for retirement with the TSP calculator. I plan on leaving my money in G Fund after retirement, and for interest, I’ve been putting 3 percent. Is that a conservative enough amount?

A. The calculator is unrealistic in that:

1. It assumes that a constant rate of investment return will be earned each and every year, like clockwork;

2. You can predict what this rate will be;

3. You know how long you’re going to live;

4. Inflation isn’t a factor.

Each of these assumptions is absurd. I think that the calculator is, at best, of little use, and, at worst, dangerous. You’ll find an article I wrote on the subject here: http://www.variplan.com/uploadedDocuments/1282316219Use_TSP_calculators_at_your_own_risk.pdf.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

Leave A Reply