One of the biggest questions federal employees ask before retirement is:
How much monthly income can my TSP actually produce?
The answer depends on your balance, withdrawal strategy, and other income sources like your FERS pension.
If you want to model your exact numbers, use the calculator here:
https://fersfree.com
Start With the Right Question
Instead of asking:
How much can I withdraw?
Ask:
How much can I withdraw without running out of money?
That’s the real goal.
The 4% Rule
The most common rule:
Withdraw 4% per year
Example:
- $500,000 TSP
- 4% = $20,000/year
- = $1,667/month
Example Scenarios
$250,000
- $10,000/year
- $833/month
$500,000
- $20,000/year
- $1,667/month
$1,000,000
- $40,000/year
- $3,333/month
3% vs 4% vs 5%
- 3% = safer, longer-lasting
- 4% = balanced
- 5% = higher risk
Why FERS Changes Everything
Your pension already provides income.
That means your TSP only needs to fill the gap.
Example:
- Expenses: $6,000
- Pension: $3,500
- Gap: $2,500
TSP fills the difference.
Withdrawal Strategies
Fixed
- Same monthly amount
- Simple, predictable
Dynamic
- Adjust based on market
- More sustainable
5 Common Mistakes
- Withdrawing too much early
- Ignoring taxes
- Not planning for healthcare
- Ignoring pension impact
- Not testing bad markets
What to Do Next
Compare:
- 3% vs 4% vs 5%
- Different retirement ages
- TSP + pension combined
Disclaimer
Educational purposes only. Not financial advice.