How much do you need in your TSP, savings, or investments for a secure retirement? The traditional 4% rule doesn’t suit everyone, especially federal employees. The real answer depends on your budget.
Budget First
Two retirees may have the same pension, but one thrives while the other struggles. Why? Spending habits. Review your lifestyle. Downsizing, reducing debt, and living within your means are key.
Pension & Supplement
Example:
- Gross Pension: $2,500
- Survivor’s Benefit: -$250
- FEHB: -$400
- FEGLI: -$35
- Taxes: -$300
- Net Pension: $1,515
- FERS Supplement: $1,500
- Taxes: -$225
- Net Supplement: $1,275
Total Fixed Income: $2,790/month
TSP Income
Using a 4% withdrawal:
- $400,000 TSP → $16,000/year → $1,333/month gross
- After taxes: about $1,067/month
Putting It Together
Fixed income ($2,790) + TSP ($1,067) = $3,857/month
Is that enough? For some, yes. For others, no. Private plans can provide higher guaranteed lifetime income, often nearly double what traditional withdrawals produce, with also, guaranty of principal.
Bottom Line
Affording retirement isn’t about a single number—it’s about balancing income resources with your lifestyle and expenses.
Your budget determines your retirement comfort and security.
