We set the default rate for prior to retirement at 5. 75% and rate of return after retirement at 4. 0% with a valid variety of 0% to 20% for each. You must choose presumptions-- or series of assumptions-- that are right for you based upon your specific circumstances. A Good Read of money from your retirement benefits (e.
CSRS, FERS, Social Security), annuities from TSP and other savings, and any post-retirement revenues you entered are summed over the expected years in retirement. The quantity of money you would have made (with forecasted raises) if you continued to work rather than retire is also summed up over the same amount of time.
If the calculated replacement rate is less than the preferred replacement rate, the TSP contribution rate is increased bit by bit (0. 25% of salary) up until the computation comes out to the replacement rate objective or it hits the tax deferral limit (presently $17,000). If that isn't enough money, the Federal Ballpark E$ timate does the exact same with the non-TSP savings up until the combined overall is enough to hit your replacement rate goal, or an outright limitation of 50% of income is reached.
What this indicates is that the FBE will take the number of years you expect to reside in retirement and average the replacement rate during that time. The Federal Ballpark E$ timate uses 70% as a default rate, however will permit you to choose any rate in between 20% and 120%. Replacement Rate Desired The replacement rate is the part of your pre-retirement earnings that will be changed by your retirement income.
0 
Star