TSP Withdrawal Calculator — Methodology

How This Calculator Works

The TSP Withdrawal Calculator projects your total federal retirement income by combining three sources: Thrift Savings Plan withdrawals, FERS basic benefit (pension), and Social Security. It models different withdrawal rates, estimates how long your TSP portfolio will last, projects Required Minimum Distributions, and shows the tax impact of traditional vs. Roth TSP withdrawals.

Inputs and Assumptions

• Traditional TSP balance: Your pre-tax TSP balance. All withdrawals from this balance are taxed as ordinary income.
• Roth TSP balance: Your after-tax Roth TSP balance. Qualified withdrawals (5+ years, age 59.5+) are completely tax-free.
• Retirement age: When you begin TSP withdrawals. Federal employees may access TSP penalty-free at age 55 if separating in the year they turn 55 or later (the “Rule of 55”).
• Birth year: Sets your RMD age: 73 if you were born before 1960, 75 if born in 1960 or later.
• FERS pension (monthly): Your FERS basic benefit. Calculate using our FERS Pension Calculator or your HR estimate.
• Social Security (monthly): Your projected SS benefit. Check ssa.gov/myaccount for your estimate.
• Desired monthly income: Your target retirement spending, used to calculate the income gap or surplus.
• Withdrawal rate: The percentage of your total TSP balance withdrawn annually. Default 4%, based on the Trinity Study's safe withdrawal rate research.
• Assumed growth rate: Default 5%. Represents a balanced TSP allocation (roughly 50/50 stock/bond). TSP L Income fund targets approximately 4-5% long-term; a more aggressive allocation (60%+ stocks) might target 6-7%.

Core Formulas

TSP Monthly Income

tspMonthlyIncome = (traditionalBalance + rothBalance) × withdrawalRate / 12

This assumes proportional withdrawals from both traditional and Roth TSP based on their share of the total balance.

Total Monthly Income

totalMonthlyIncome = tspMonthlyIncome + fersPension + socialSecurity

Income Gap

incomeGap = desiredMonthlyIncome - totalMonthlyIncome

Positive values indicate a shortfall; negative values indicate a surplus.

Tax Breakdown

rothRatio = rothBalance / totalBalance
taxableWithdrawal = annualWithdrawal × (1 - rothRatio)
taxFreeWithdrawal = annualWithdrawal × rothRatio

Traditional TSP withdrawals are fully taxable as ordinary income. Roth TSP withdrawals are tax-free if qualified.

Portfolio Longevity

The calculator iterates month by month: each month the balance grows by the monthly growth rate, then the monthly withdrawal is subtracted. The simulation runs until the balance reaches zero or 60 years (720 months), whichever comes first.

balance[n+1] = balance[n] × (1 + monthlyGrowth) - monthlyWithdrawal

Required Minimum Distributions (RMDs)

RMDs apply to your traditional balance only. Since 2024, Roth money in a TSP account is not subject to RMDs (SECURE 2.0 Act, section 325), so the Roth balance never enters the RMD calculation. Your RMD age comes from your birth year: 73 if born before 1960, 75 if born in 1960 or later. TSP RMDs start in the first year you are at that age and have left federal service (tsp.gov; 26 CFR 1.401(a)(9)-2(b)), so the first RMD is at your RMD age or your retirement age, whichever is later.

The calculator grows your traditional TSP balance from retirement to that first RMD year (accounting for assumed growth and withdrawals), then computes annual RMDs from the IRS Uniform Lifetime Table through age 90. Before October 2026 it started every user at 73, which was two years early for anyone born in 1960 or later.

rmdAmount = balance / uniformLifetimeTableFactor

IRS Uniform Lifetime Table Factors Used

Source: IRS Publication 590-B, Table III (Uniform Lifetime), updated for SECURE 2.0 Act (December 2022).

Data Sources

• TSP expense ratios: TSP.gov Expenses and fees
• IRS Uniform Lifetime Table: IRS Publication 590-B
• SECURE 2.0 Act RMD rules: Consolidated Appropriations Act, 2023 (Division T — SECURE 2.0)
• TSP withdrawal options, RMD ages and the Roth RMD rule: TSP.gov Taking money from your account
• FERS retirement system: OPM FERS Information

Limitations and Caveats

• The calculator uses a constant growth rate. Actual TSP returns vary year to year, and sequence-of-returns risk can significantly impact outcomes.
• Tax projections show the split between taxable and tax-free withdrawals but do not calculate actual federal or state tax liability. Effective tax rates depend on your full income picture, filing status, deductions, and state of residence.
• RMD calculations assume a single account owner using the Uniform Lifetime Table. If your spouse is more than 10 years younger and is your sole beneficiary, you may use the Joint Life and Last Survivor Table, which produces lower RMDs.
• The calculator does not model inflation adjustment of withdrawals. In practice, you would typically increase your withdrawal amount each year to maintain purchasing power.
• FERS pension and Social Security amounts are entered as fixed values. In reality, FERS includes COLA adjustments and Social Security has annual cost-of-living increases.
• The TSP annuity option (through MetLife) is not modeled. Annuity rates change frequently and depend on interest rates at the time of purchase.
• This calculator does not account for the FERS Supplement, which bridges the gap until Social Security eligibility at 62. It is paid to those who retire at their minimum retirement age (MRA) with 30 years of service or at 60 with 20 years. Involuntary and early (VERA) retirees get it only from their MRA, and MRA+10 retirees never get it.

When to Consult a Professional

Federal retirement planning involves complex interactions between TSP, FERS pension, Social Security, FEHB health insurance, and tax law. Consider consulting a fee-only financial advisor who specializes in federal benefits if you are:

• Within 5 years of retirement and need to optimize your withdrawal sequence
• Considering Roth TSP conversions to reduce future RMDs
• Deciding between the TSP annuity and monthly payment options
• Planning for a surviving spouse's benefit under FERS
• Evaluating whether to keep money in TSP vs. rolling to an IRA