Retirement and TSP forecasting


Q. I’m a 44-year-old federal employee with 20 years of service and hopes of retirement at age 62. This means 17 more years of TSP contribution and growth opportunity. I’ve been using the “How much will my savings grow?” calculator for several years now and I attempt to capture a best, medium and worst-case scenario when it comes to the percentages of expected annual rate of return and expected annual pay increase. From a financial advisor perspective, what would you consider a safe range of annual rate of return for TSP growth?

A. The TSP’s calculator has a fatal flaw. It assumes that the average rate of return will be realized each and every future year. Obviously, this is not going to happen. The truth is that using an average rate of return in this way, when contributions or withdrawals will be affecting your account along the way, is unreliable and should not be trusted.

Because of this problem, there is no good answer to your question. It’s kind of like asking me to recommend a grade of gasoline for your mule. My answer is that you should not use the TSP’s calculator to make decisions about your retirement. It’s the wrong tool for the job.


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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 and view his blog at

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