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TSP

Administered by the Federal Retirement Thrift Investment Board, this defined contribution plan for federal employees has roughly 4,614,874 participants, and over $358 billion in assets under management. Ask your TSP questions and post related topics here.

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Marieke  
#1 Posted : Monday, January 07, 2019 11:57:17 AM(UTC)
Marieke

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I will be retiring in a year and a half and I am trying to figure out how much to withdraw from my TSP on a monthly basis. The TSP website has a retirement calculator that offers an option to see how much one could withdraw while taking inflation into account (the Life Expectancy withdrawal option). The problem is it readjusts the monthly income at age 70 because of the underlying life expectancy tables which adjust if someone lives past age 70. Does someone know of a good retirement calculator that doesn't make this adjustment at age 70? I want to know how long my TSP will last if I increase my withdrawals to account for inflation, but the TSP calculator makes this impossible because of its automatic downward adjustment at age 70. As an example, if I enter that I am currently 55 years old, expect to retire at 56, live to 98, have $400K, set a fixed monthly payment at $1,550, and assume a 3% earnings rate, the TSP retirement calculator says if I took out a fixed $1,550 every month without adjusting for inflation, my TSP would run out at age 90. In the Life Expectancy table, however, at age 69 it says I would be taking out $1,560.73 and at age 70 this drops to $986.44. By age 98 I would be taking out $1,198 (still not back up to the $1,560 at age 69) with $87K remaining in my TSP at that time. I understand why it makes this adjustment, but I'm assuming I won't be able to afford to take out $600 less per month at age 70 and that, in fact, I will need to continue to take out more each month to account for inflation. Can someone recommend a more realistic retirement calculator that allows me to enter the same parameters, but doesn't adjust downward at age 70 and beyond? Thank you!
GoHuskers  
#2 Posted : Monday, January 07, 2019 5:45:25 PM(UTC)

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Maybe this one would work for you

https://www.mycalculators.com/ca/retcalc2m.html

Of course it requires you to make guesses about the length of your retirement, how much your savings will earn, and what the inflation rate would be. For instance using the hypothetical figures you give you'd show i year til retirement, 42 years of expected retirement, 3% earnings rate, whatever you guess the inflation rate will be, and $400,000. For the last percent you'd need to divide your initial yearly withdrawal of $18,900 by 400,000 to get the percentage figure to enter. (you might find out that the $400,000 won't last 42 years at that rate of withdrawal.)
Marieke  
#3 Posted : Tuesday, January 08, 2019 11:14:55 AM(UTC)
Marieke

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This is a great calculator. Thanks for the reference. And you're right, according to the calculator, my example wouldn't last 42 years. This is excellent information.
The HalfBreed  
#4 Posted : Sunday, January 13, 2019 8:54:26 PM(UTC)

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Choices and suppositions...do your best. We could all die 1 month after beginning distributions.

Like a famous comedian once said, "Don't Sweat the petty stuff, and don't pet the sweaty stuff"

There's no calculator in the world that will actually figure it out. Do your best, enjoy life.
RETIRED 12/19/2012 @ age 57
Good Bye Tension...Hello Pension !
Exit7A  
#5 Posted : Sunday, January 27, 2019 5:17:43 PM(UTC)
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Originally Posted by: Marieke Go to Quoted Post
This is a great calculator. Thanks for the reference. And you're right, according to the calculator, my example wouldn't last 42 years. This is excellent information.


The TSP calculator (if read correctly) states the same thing. When using the TSP calculator, it gives you two readings: Fixed Dollar and Life Expectancy. The Fixed Dollar is the amount you stated you wanted to take out monthly ($1550) while the Life Expectancy ignores your monthly fixed and bases it off the number of years (you stated you would live) to determine how much you could afford to take out month to month. You have to click on either "Graph" or "Combined" and read the notes with regards to estimates and reason for the dip at age 70.
That's all I got to say about that.
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